If Mexico enters into an agreement with other countries to keep the exchange rate among their currencies fixed it is taking part in: A. a managed float exchange-rate system. B. a gold standard exchange-rate system. C. a fixed exchange-rate system. D. a floating currency exchange-rate system.

Question

Antoine Hill

Social Studies

8 December, 05:01

If Mexico enters into an agreement with other countries to keep the exchange rate among their currencies fixed it is taking part in: A. a managed float exchange-rate system. B. a gold standard exchange-rate system. C. a fixed exchange-rate system. D. a floating currency exchange-rate system.

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Answers (1)

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Larry · Answer 1

Option C, a fixed exchange-rate system, is the right answer.

Explanation:

Another term for the Fixed Exchange Rate is the pegged exchange rate. Following this exchange rate management, the currency of a nation is tied to the value of another individual currency such as the dollar or a basket of money, for instance, euro or to gold. The main aim of this rating system is to keep the value of a currency within a narrow band.