Suppose That Country a Pegs Its Currency to the Currency

Multiple Choice

Suppose that country A pegs its currency to the currency of country B. Which of the following will NOT be a benefit of this arrangement to country A?

A) lower transactions costs for A to conduct international trade with country B
B) increased capital flows between the two countries because of increased certainty of future exchange rates
C) decreased migration between the two countries because of increased certainty of future exchange rates
D) lower costs of economic transactions costs between the two countries, leading to welfare gains for country A