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In Response to Rising Real Interest Rates in Germany After

Question 44

Multiple Choice

In response to rising real interest rates in Germany after German reunification, other western European countries that were part of the European Exchange Rate Mechanism were forced to


A) decrease interest rates because they wanted to maintain fixed exchange rates with the German mark.
B) increase interest rates because they were willing to let their currencies float against the German mark.
C) decrease interest rates because they were willing to let their currencies float against the German mark.
D) increase interest rates because they wanted to maintain fixed exchange rates with the German mark.

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