To Maintain the Peg, a Nation Must Keep Its Circulating

Multiple Choice

To maintain the peg, a nation must keep its circulating money supply constant. What factor(s) (in addition to its own actions) might result in a change in the money supply?

A) a change in the demand for money produced by an output shock or a change in foreign rates of interest
B) an increase in the trade gap
C) the issuance of new government bonds by the nation's government
D) a crackdown on money laundering activities by multinational corporations