Question

In the IMF currency classification scheme, the US dollar would fall into what category Category 1:...

  1. In the IMF currency classification scheme, the US dollar would fall into what category
    1. Category 1: Hard peg
    2. Category 2: Soft peg
    3. Category 3: Floating arrangements
    4. Category 4: Residual
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Answer #1

US dollar would be falling into floating arrangement as they are never pegged against another currency.

Hard peg and soft peg means fixation of the value of the domestic currency in respect to a basket of international currencies.

US dollar is a floating currency and it is not fixed against other international currencies. it is regularly traded in order to derive the true value through price discovery mechanism

So the correct answer would be

(c) category 3: floating arrangement.

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