Pegging a Country's Exchange Rate to the Dollar Can Be

question 166

Multiple Choice

Pegging a country's exchange rate to the dollar can be advantageous in all of the following situations except

• A)if the country has extensive trade with the United States.
• B)if investors believe the dollar to be more stable than the domestic country's currency.
• C)if a country wishes to conduct independent monetary policy.
• D)if imports are a significant fraction of the goods the country's consumers buy.

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