An exchange rate regime that allows the currency to appreciate gradually over time but within a specified limited band set by government is a:Group of answer choicescrawling peg regime.partial floating regime.floating rate regime.managed floating regime.

Which of the following statements is correct:I. Crawling peg regime allows the currency to depreciate gradually over time within a limited range;II. Free float can be characterised by supply and demand forces determining the exchange rate with complete independence from government;III. According to linked exchange rate regime, one currency is directly linked to the weighted average of a basket of major currencies such as USD, EUR and GBP;IV. Exchange rate regimes are established each nation-state, or monetary union;V. Managed float regime used to be popular in the past but recently the major economies have established the floating exchange rate regime.Question 5Select one:a.All of the statement are correctb.All of the statement are falsec.Only I is correctd.Only I and V are correcte.Only I, II, III and V are correctf.Only II and V are correctg.Only II and III are correcth.Only III is correcti.Only IV is correctj.Only II is correctk.Only II and IV are correct

A fixed exchange rate regime(a) forces a country to give up free international flows of capital.(b) forces a country to abandon independent monetary policy(c) can eliminate exchange rate uncertainty(d) is the model used by the U.S. Federal Reserve.

A crawling peg refers to: Question 1 Answer a. a large and sudden currency depreciation. b. a fixed exchange rate regime in which the currency is adjusted very frequently (e.g., monthly) to reflect market conditions. c. a fixed exchange rate regime in which the currency is adjusted infrequently (e.g., every 2 years) to reflect market conditions. d. a drag on exchange rate adjustment caused by imperfect markets.

A country that has a fixed-exchange-rate regime:is more likely to inflate the money supply than a country with a floating-exchange-rate regime.can never have a central bank that can conduct independent monetary policy.can still conduct independent monetary policy.no longer has the ability to implement capital controls.

Exchange RateCurrency pegging refers to:Floating exchange rateFixed exchange rateAppreciating exchange rateDepreciating exchange rate