With a Flexible Exchange Rate System, to Gain Credibility with Investors

Multiple Choice

With a flexible exchange rate system, to gain credibility with investors or savers, a nation will often:

A) adopt a nominal anchor to keep currency growth in line with a measurable indicator, such as exchange rates or inflation rates.
B) limit the power of the central bank by having elected officials set monetary targets.
C) give more power to the prime minister to stop inflation and lower unemployment.
D) temporarily adopt a gold standard.