To Maintain a Pegged Rate, a Nation Faces a Trilemma

question 147

Multiple Choice

To maintain a pegged rate, a nation faces a trilemma and must also:

• A) generate extra export revenues.
• B) watch carefully to ensure imports and exports are equal.
• C) adjust its interest rates and money supply to ensure the home interest rate is equal to the foreign interest rate to prevent pressure on the exchange rate.
• D) restrict foreign capital inflows and domestic capital outflows.

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Definitions:

Board Of Directors' Meetings

Formal gatherings of the board members of an organization to deliberate and decide on corporate affairs.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, making them partial owners of the company.

Classes Of Common Shares

Different categories of common stock that a corporation may issue, each with specific rights, privileges, and benefits that may vary from other classes.

Unequal Voting Rights

A scenario in corporate governance where different classes of shares are allocated different numbers of votes per share.