What is it called when a nation sets the value of its currency equal to another currency, gold, or a group of currencies?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Explanation

A fixed exchange rate occurs when a country anchors its currency's value to that of another currency, gold, or a basket of currencies to maintain stability.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What is it called when a nation sets the value of its currency equal to another currency, gold, or a group of currencies?

Explanation

More Basic of Economics MCQs