A Noncooperative Outcome After the Center Nation Has Undertaken a Stabilization

Multiple Choice

A noncooperative outcome after the center nation has undertaken a stabilization policy in response to an asymmetric shock would be that the:

A) center country abandons its own stabilization policy in favor of the home country.
B) home country absorbs the losses resulting from the stabilization policy in the center country.
C) center country makes concessions, recognizing the impact on the home country and thereby sharing the pain.
D) peg is temporarily abandoned.