Why Are Governments Often Reluctant to Announce That They May

question 66

Multiple Choice

Why are governments often reluctant to announce that they may devalue a currency?

• A)Because it will result in a higher exchange rate.
• B)Because devaluation is only possible with flexible exchange rates.
• C)Because devaluation is only possible under the gold standard.
• D)Because it implies a lack of confidence which will discourage people from holding the currency.

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