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Why Are Governments Often Reluctant to Announce That They May

Question 94

Multiple Choice

Why are governments often reluctant to announce that they may devalue a currency?


A) Because it will result in a higher exchange rate.
B) Because devaluation is only possible with flexible exchange rates.
C) Because devaluation is only possible under the gold standard.
D) Because it implies a lack of confidence which will discourage people from holding the currency.

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