If a country sets a pegged exchange rate that is below the equilibrium exchange rate, how can the country maintain the peg?
A) by selling surplus domestic currency at the pegged rate
B) by purchasing surplus domestic currency at the pegged rate
C) by decreasing the pegged exchange rate
D) by purchasing surplus domestic currency at the equilibrium exchange rate
A
Economics
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If two goods are complements, a fall in the price of one will lead to an increase in demand for the other.
a. true b. false
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A contractionary monetary policy can reduce the inflation rate without causing a rise in unemployment if expectations are formed rationally and monetary policy is
A) combined with expansionary fiscal policy. B) carried out in total secrecy. C) publicly announced and credible. D) combined with contractionary fiscal policy.
Economics