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To Maintain a fiXed Exchange Rate Under a Shortage of FX

Question 133

Multiple Choice

To maintain a fixed exchange rate under a shortage of FX reserves, the government has the following options, except


A) encourage foreign investment inflows, and restrict foreign investment outflows.
B) encourage imports, and discourage exports.
C) impose exchange controls or capital controls.
D) use monetary or fiscal policies to reduce domestic spending.

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