alleryStart learning →A central bank is described as able to implement which two peg policies?
AOpen peg and closed peg
BHigh peg and low peg
CSoft peg and hard peg
DLong peg and short peg
Answer & Solution
Correct answer: C. Soft peg and hard peg
1. Pegs come in two strengths.
2. A peg makes the exchange rate differ from the market outcome.
3. A central bank can implement two named policies.
4. It can implement soft peg and hard peg policies.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Exchange Rates and International Capital Flows'_
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