In General, When Market Expectations Indicate a Non-Credible Peg, or When

Multiple Choice

In general, when market expectations indicate a non-credible peg, or when the costs of the peg are not greater than the benefits of pegging, what will be the equilibrium situation?

A) to depreciate
B) to peg
C) uncertain, because in this situation there is no self-fulfilling equilibrium
D) to sell more government bonds