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For a Country with a Fixed Exchange Rate That Is

Question 28

Multiple Choice

For a country with a fixed exchange rate that is running continuous overall payments surpluses:


A) the country's monetary authority will eventually run out of foreign reserves.
B) the country has an overvalued currency.
C) the country is in an optimal situation.
D) the country's monetary authority will suffer losses on its official reserve holdings if the country's currency is revalued.

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