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    International Economics Study Set 9
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    Exam 20: Exchange Rate Crises: How Pegs Work and How They Break
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    In General, Whenever the Costs of Pegging Outweigh the Benefits
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In General, Whenever the Costs of Pegging Outweigh the Benefits

Question 56

Question 56

Multiple Choice

In general, whenever the costs of pegging outweigh the benefits of a non-credible peg, the government will always:


A) depreciate.
B) peg.
C) make temporary fixed rates permanent.
D) sell more government bonds.

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