What Is a Problem in Emerging Markets That Affects a Nation's

question 134

Multiple Choice

What is a problem in emerging markets that affects a nation's ability to peg its currency?

• A) The low level of GDP means the demand for money is always small.
• B) The high level of GDP means the demand for money is always large.
• C) As the nation develops, the ratio of the demand for money to GDP rises.
• D) Because of the volatility of GDP, the demand for money is volatile and the nation must hold higher levels of reserves to peg.

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