Select the correct benefits and drawbacks to a Non Convertible exchange rate:
a. Could be used to replace domestic currency if the currency is weak, financial institutions are suspicious, and the dollar is strong.
b. Supply and demand are market driven but governments can manipulate value by either printing money or removing currency from circulation.
c. Could do very well if tied to a strong currency but suffers from vulnerability to other nation’s recession.
d. Could produce a private good economy but encourages a currency black market.
Ans: d
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