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The Appropriate "Medicine" for Correcting Payments Imbalances Under a Fixed

Question 163

Multiple Choice

The appropriate "medicine" for correcting payments imbalances under a fixed exchange rate system is


A) inflation for deficit countries and recessions for surplus countries.
B) no change for surplus countries, tax cuts for deficit countries.
C) inflation for surplus countries and recessions for deficit countries.
D) sales of gold for deficit countries and revaluations for surplus countries.

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