Does it appear that currency boards make fixed exchange rates credible?
What will be an ideal response?
No, because is prohibited by law from acquiring any domestic assets, so all the currency it issues automatically is fully backed by foreign reserves. Also countries that adopt currency board, do it because one of the mayor advantage aside from the constrain it places on fiscal policy, central bank can never run out of foreign exchange reserves in the face of a speculative attack on the exchange rate. So the currency board cannot fix exchange rates.
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In the long run, perfectly competitive firms earn just enough revenue to
A) pay all fixed costs. B) pay all accounting costs. C) pay all opportunity costs. D) attract entry.
In the options market, the right to buy an underlying asset rests with
A) call buyers. B) put buyers. C) call sellers. D) put sellers.