Understanding Exchange Rate Regimes

In the context of international economics, exchange rate regimes play a crucial role in determining how a country's currency is valued against others. These regimes can generally be classified into fixed, flexible, and pegged categories. Understanding the differences between these regimes is essential for analyzing their impact on trade, inflation, and economic stability.

Consider the following statements about exchange rate regimes:

1. A fixed exchange rate regime involves the direct intervention of the government or central bank to maintain the value of its currency within a narrow range relative to another currency or a basket of currencies.

2. A flexible exchange rate regime allows foreign exchange values to fluctuate according to market forces without direct government or central bank intervention.

3. A pegged exchange rate regime is the same concept as a fixed exchange rate regime, where the currency is tied to a specific value or a benchmark currency.

Based on this information, which statement is true?