In practice, both a fixed parity regime and a target zone regime allow the exchange rate to

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In practice, both a fixed parity regime and a target zone regime allow the exchange rate to float within a band around the parity level. The most likely rationale for the band is that the band allows the monetary authority to:

A. be less active in the currency market.

B. earn a spread on its currency transactions.

C. exercise more discretion in monetary policy.

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Economics For Investment Decision Makers

ISBN: 9781118111963

1st Edition

Authors: Sandeep Singh, Christopher D Piros, Jerald E Pinto

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Question Posted: Mar 09, 2024 11:02 AM

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In practice, both a fixed parity regime and a target zone regime allow the exchange rate to

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Economics For Investment Decision Makers

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