A country which does not devalue when financial markets expect it to will probably suffer
A)a real appreciation of its currency.
B)higher interest rates.
C)a default on its national debt.
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

When a country does not devalue its currency despite market expectations, it may need to raise interest rates to defend the currency and maintain its value, making holding the currency more attractive.

A Country Which Does Not Devalue When Financial Markets Expect