Under a Fixed Exchange Rate Regime, What Would Be the Result

question 3

Multiple Choice

Under a fixed exchange rate regime, what would be the result if a country rapidly increased its money supply by printing currency?

• A)It would lead to an increase in the worth of the currency.
• B)The prices of imports would become more attractive in the country.
• C)The country's goods would be highly competitive in world markets.
• D)Trade surplus in the country would increase.
• E)It would lead to price deflation in the country.

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