Asked by Tyler Decker on May 29, 2024
Verified
The government of Chiresia, a country in South America, maintains a fixed exchange rate. This scenario is an example of _____.
A) extremism
B) trade control
C) currency control
D) deregulation
Currency Control
Government policies or regulations that restrict the exchange of the domestic currency for foreign currencies.
Fixed Exchange Rate
A government or central bank policy that pegs the country's currency to another currency or to a reference value, such as gold, and does not allow it to fluctuate freely in the Forex market.
Extremism
The holding of extreme political or religious views and the actions taken to support or achieve them.
- Analyze the methods by which governments manage economic operations via controls on trade and currency.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
C
Explanation :
Maintaining a fixed exchange rate is an example of currency control, as it involves the government intervening in the foreign exchange market to keep the currency's value at a set level against another currency or a basket of currencies.
Learning Objectives
- Analyze the methods by which governments manage economic operations via controls on trade and currency.