If a country sets a pegged exchange rate that is above the equilibrium exchange rate, how can the country maintain the peg?
A) by purchasing surplus domestic currency at the pegged rate
B) by purchasing surplus domestic currency at the equilibrium exchange rate
C) by selling surplus domestic currency at the pegged rate
D) by increasing the pegged exchange rate
A
Economics
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a. True b. False Indicate whether the statement is true or false
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If international financial transactions are prohibited
A. exchange rates cannot remain fixed. B. borrowers in poorer countries will probably pay low interest rates. C. lenders in the richer countries will probably earn high rates of return. D. lenders in the richer countries will probably earn low rates of return.
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