Currencies of countries with currency boards will become uncompetitive and overvalued if
A) local inflation rates remain higher than the inflation rate in the country to which the currency is pegged.
B) the country to which the currency is pegged experiences a trade deficit.
C) local inflation rates are lower than the inflation rate in the country to which the currency is pegged.
D) the country to which the currency is pegged experiences a trade surplus.
Correct Answer:
Verified
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