In the ERM, each country fixed participant Collectively the group ________ against the rest of the world?
Correct answer: A. a nominal exchange rate, floated
- A. a nominal exchange rate, floated
- B. a real exchange rate, pegged
- C. a purchasing power parity, pegged
- D. a real exchange rate, floated
Explanation
Under the Exchange Rate Mechanism, participating currencies were kept at agreed nominal rates against one another. As a group, they were allowed to float collectively against currencies outside the system.
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