Also, the choice of an exchange-rate system affects whether and how currency
crises occur. In recent years, fixing the value of the domestic currency to that of a
large, low-inflation country has become popular. It helps to keep inflation under
control by linking the inflation rate for internationally traded goods to that found
in the anchor country. For example, prior to 2002, the exchange rate for the Argentine
peso was pegged at one peso per U.S. dollar. Therefore, a bushel of corn sold on
the world market at $4 had its price set at 4 pesos. If the public expects this
exchange rate to be unchangeable, then the fixed rate has the extra advantage of
anchoring inflation expectations for Argentina to the inflation rate in the United
States, a relatively low-inflation country.