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If a Country Sets a Pegged Exchange Rate That Is

Question 192

Multiple Choice

If a country sets a pegged exchange rate that is below the equilibrium exchange rate,how can the country maintain the peg?


A) by purchasing surplus domestic currency at the pegged rate
B) by selling surplus domestic currency at the pegged rate
C) by purchasing surplus domestic currency at the equilibrium exchange rate
D) by decreasing the pegged exchange rate

Correct Answer:

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