A Disadvantage of Using a Pegged Currency System Is That

question 43

Multiple Choice

A disadvantage of using a pegged currency system is that:

• A)the country whose currency is pegged must decide on its own economic policies.
• B)the country whose currency is pegged does not have the option of adopting economic policies different from those of the country to which the currency is pegged.
• C)the cost of maintaining the peg is substantial and must be paid by those transacting business in the country whose currency is pegged.
• D)international currency markets shun currency whose value is pegged to another currency.

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Definitions:

Self-Serving Attributions

A cognitive bias where individuals attribute their successes to internal or personal factors while attributing failures to external or situational factors.

Implicit Prejudice

Negative attitudes or affective reactions associated with an outgroup, for which the individual has little or no conscious awareness and which can be automatically activated in intergroup encounters.

Unconsciously

The process of thoughts, feelings, or behaviors occurring without conscious awareness or intention by the individual.

Negative Attitudes

Refers to an unfavorable evaluative stance toward a person, group, concept, or object, often based on prejudgment or negative beliefs.