Because of the ERM, If Britain Desires to Maintain Fixed

Multiple Choice

Because of the ERM, if Britain desires to maintain fixed exchange rates, then what would Britain be forced to do after German reunification?

A) It would increase its interest rate and follow the central country's lead.
B) It would ignore the increase in the German interest rate and hope for the best.
C) It would change over to an exchange rate regime based on gold.
D) It would decrease its interest rate to stimulate its economy.