Suppose a Country That Has Been Pegging Its Currency Is

question 69

Multiple Choice

Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future revaluation.In such a situation,we would generally expect which of the following to occur?

• A)an increase in the domestic interest rate
• B)an announcement by the central bank that a large revaluation will occur in the near future
• C)an increase in demand for the country's currency
• D)all of the above
• E) none of the above

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Definitions:

Leisure Time

Leisure time is the period when one is not engaged in work or other obligations, available for relaxation, hobbies, and personal activities.

Hourly Wages

Compensation paid to employees based on the number of hours worked, critical in calculating labor costs and income.

Economic Rent

Income derived from the ownership of a factor of production that is in fixed supply, exceeding what is necessary to keep it in its current use.

Employment Gains

The increase in the number of people who are employed, reflecting positive growth in the job market.