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      Question

      The exchange rate system where the value of a currency

      is pegged to another major currency or basket of currencies is called:
      A Floating Exchange Rate Correct Answer Incorrect Answer
      B Fixed Exchange Rate Correct Answer Incorrect Answer
      C Managed Floating Correct Answer Incorrect Answer
      D Currency Board Correct Answer Incorrect Answer

      Solution

      Under a Fixed Exchange Rate system, a country's currency value is tied (pegged) to another major currency (like USD or EUR) or a basket, with the central bank intervening to maintain the rate.

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