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A Major Problem with Countries Setting Fixed Exchange Rates for Their

Question 95

Multiple Choice

A major problem with countries setting fixed exchange rates for their currencies is


A) Some participating countries are likely to experience continuing balance-of-payments deficits.
B) The foreign exchange reserves of participating countries will always be depleted.
C) Import and export prices will probably become more unstable.
D) The fixed rate will have to be maintained by currency market intervention.

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