Compared to a situation in which there is no change in the value of the dollar relative to the peso,in which of the following situations would you be worse off?
A) you borrow 10,000 pesos,you earn income in dollars,the dollar appreciates against the peso,you must pay back the loan in pesos
B) you borrow $10,000,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in dollars
C) you borrow $10,000,you earn income in pesos,the dollar appreciates against the peso,you must pay back the loan in dollars
D) you borrow 10,000 pesos,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in pesos
Correct Answer:
Verified
Q141: A currency pegged at a value above
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