Consider the following scenario.The Swiss franc is fixed to the U.S.dollar.Market pressures lead to a move away from the peg.Which of the following can be used to restore the previous peg?
A) The Swiss central bank can use a commodity such as gold to back the previous peg.
B) The Swiss government can lower domestic prices to offset import pressures.
C) Allow the exchange by the market and in the long run the peg will be restored.
D) The Swiss central bank can purchase or sell U.S. dollars.
Correct Answer:
Verified
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