Under What Circumstances Will a Peg Have a Longer Grace

question 136

Multiple Choice

Under what circumstances will a peg have a longer grace period before investors get nervous and dump the currency?

• A) when there is no coordinated effort to attack the currency
• B) when there is a lower cost to the economy of maintaining the peg
• C) when traders and speculators are spread out and small in size with no common belief about the situation
• D) when there is no coordinated effort to attack the currency, a lower cost to the economy of maintaining the peg, and when traders and speculators are spread out and small in size with no common belief about the situation

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