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.

---

Definitions:

Techniques

Methods or procedures used to accomplish a specific task or solve problems in various fields.

Knowledge

Information, understanding, and skills acquired through experience or education; the theoretical or practical understanding of a subject.

New Product

A product that has been recently introduced to the market, offering unique features or improvements over existing products.

Foreign Market

A market outside of a company's home country where it can sell its products or services.