Currencies of countries with currency boards will become uncompetitive and overvalued if local inflation rates are lower than the inflation rate in the country to which the currency is pegged.

Question

Quizplus · Accepted Answer

Currencies of countries with currency boards may become uncompetitive and overvalued if local inflation rates are higher, not lower, than the inflation rate in the country to which the currency is pegged.

Currencies of Countries with Currency Boards Will Become Uncompetitive and Overvalued