Under a Pegged Exchange-Rate System,which Does Not Explain Why a Country

question 145

Multiple Choice

Under a pegged exchange-rate system,which does not explain why a country would have a balance-of-payments deficit?

• A) Very high rates of inflation occur domestically
• B) Foreigners discriminate against domestic products
• C) Technological advance is superior abroad
• D) The domestic currency is undervalued relative to other currencies

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Definitions:

Friendships

A mutual relationship between two people that is built on trust, affection, and support.

Inversely Correlated

A relationship between two variables in which one variable increases as the other decreases.

Negatively Related

A term referring to a type of relationship where an increase in one variable is associated with a decrease in another variable.

Cognitive Dissonance

Cognitive dissonance is the mental discomfort experienced when holding two or more conflicting beliefs, attitudes, or values, often leading to changes in beliefs or attitudes to reduce the discomfort.