SIE Exam Question 550: Answer and Explanation

Question: 550

Which of the following is a type of exchange rate system in which a country ties its currency to a basket of other currencies or to another measure of value, such as gold?

• A. Adjustable exchange rate system
• B. Commodity exchange rate system
• C. Fixed exchange rate system
• D. Variable exchange rate system

Correct Answer: C

Explanation:

In a fixed exchange rate system, a country ties its currency to a basket of other currencies or to another measure of value, such as gold.