The 'Destabilising Speculation' That Followed the Thai Government's Attempt to Peg

question 231

Multiple Choice

The 'destabilising speculation' that followed the Thai government's attempt to peg its currency to the US dollar resulted in Thailand abandoning its peg.The result was a(n) :

• A) appreciation of the baht relative to the US dollar and higher interest costs on dollar-denominated loans.
• B) appreciation of the baht relative to the US dollar and lower interest costs on dollar-denominated loans.
• C) depreciation of the baht relative to the US dollar and higher interest costs on dollar-denominated loans.
• D) depreciation of the baht relative to the US dollar and lower interest costs on dollar-denominated loans.

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