question archive Which of the following about the peg system is NOT TRUE:Group of answer choicesA government can peg its currency to another single currency
Which of the following about the peg system is NOT TRUE:Group of answer choicesA government can peg its currency to another single currency
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Which of the following about the peg system is NOT TRUE:Group of answer choicesA government can peg its currency to another single currency.
A government can peg its currency to a "basket" of foreign currencies.
It is situated between fixed-rate and float-rate systems.
When pegged rates become overvalued, countries are forced to deplete their foreign exchange reserves to defend the currency peg.
When foreign reserves depleted, countries try to manipulate interest rates but are often eventually forced to appreciate its currency.
