alleryStart learning →A hard peg policy is described as attempting to preserve a fixed exchange rate:
AOnly in a crisis
BOnly during trade
COnly once a year
DAt all times
Answer & Solution
Correct answer: D. At all times
1. The two pegs differ in how strictly they hold.
2. A central bank can implement soft peg and hard peg policies.
3. A hard peg policy attempts to preserve a fixed exchange rate.
4. It attempts to preserve that rate at all times.
_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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