Of the following exchange rate arrangements, in which does the ...

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Of the following exchange rate arrangements, in which does the exchange rate fluctuate around a fixed central target rate while allowing a moderate amount of fluctuation?
 
  A) Independently floating
  B) Currency Board
  C) Horizontal Bands
  D) Fixed peg

Question 2

The balance of payments is seldom in balance in practice. Discuss.
 
  What will be an ideal response?

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Answer to Question 1

C

Answer to Question 2

True. The main reasons are due to the fact that data collected or received from different sources may differ in coverage, accuracy, and timing. In addition, data on services are not reliable as well as data from the financial account. Moreover, accurate measurements of international interest and dividend receipts are particularly difficult.