If a Country with a Relatively High Inflation Rate Maintains

question 5

Multiple Choice

If a country with a relatively high inflation rate maintains a pegged exchange rate against the currency of a relatively low inflation country:

• A)its currency will depreciate.
• B)its exports will become more competitive in international market.
• C)its currency will sell at a discount.
• D)its exports will become less competitive in the international market.

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Definitions:

Corporation Act

Legislation governing the formation, operation, and dissolution of corporations, detailing their legal rights, capacities, and liabilities.

Indoor Management Rule

A legal principle that protects third parties who enter into contracts with a company, assuming the company's internal rules and procedures have been followed.

Shareholders' Resolution

A formal decision or expression of opinion passed by the shareholders of a company, often related to its management or policies.

Coffee Import Business

The business activity of bringing coffee from foreign countries into one's own country for sale and distribution.