If a Country Sets a Pegged Exchange Rate That Is

question 107

Multiple Choice

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 selling surplus domestic currency at the pegged rate
• C)by purchasing surplus domestic currency at the equilibrium exchange rate
• D)by increasing the pegged exchange rate
• E)by increasing capital outflows

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Definitions:

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The marketing chain refers to the sequence of intermediaries that goods or services pass through from the producer to the final consumer.

Deregulated

The reduction or elimination of government power in a particular industry, usually enacted to encourage competition and increase efficiency.

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The industry involving the holding, lending, and managing of money and financial instruments for individuals, businesses, and governments.

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The industry or activity of transporting goods by road, typically involving large vehicles known as trucks.