Expected Depreciation Threatens a Peg Because of All the Following

question 113

Multiple Choice

Expected depreciation threatens a peg because of all the following, EXCEPT:

• A) when investors expect the peg to fail it will fail in multiple equilibrium situations.
• B) market sentiment will raise the currency premium and lower confidence.
• C) economic fundamentals are crucial to whether a peg holds or fails.
• D) investor confidence may wane and cause a rise in interest rates.

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Definitions:

Junction

A point where two or more circuit elements meet.

Currents

The flow of electric charge across a conductor or through an electrolyte, measured in amperes (A), essential in electrical and electronic circuits.

Superposition Theorem

The current in any branch of a circuit supplied by a multipower source can be determined by finding the current produced in a particular branch by each of the individual power sources acting alone.