Multiple Choice
Pegging a country's exchange rate to the dollar can be advantageous if
A) the country does not trade much with Canada.
B) investors believe the dollar to be more stable than the domestic country's currency.
C) a country wishes to conduct independent monetary policy.
D) imports are not a significant fraction of the goods the country's consumers buy.
E) demand for the goods being exported are not sensitive to changes in price.
Correct Answer:
Verified
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