Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future devaluation.In such a situation,we would generally expect which of the following to occur?
A)a reduction in the domestic interest rate
B)an announcement by the central bank that a large devaluation will occur in the near future
C)reduction in demand for the country's currency
D)all of the above
E) none of the above

Question

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The Answer of Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future devaluation.In such a situation,we would generally expect which of the following to occur?
A)a reduction in the domestic interest rate
B)an announcement by the central bank that a large devaluation will occur in the near future
C)reduction in demand for the country's currency
D)all of the above
E) none of the above

Suppose a Country That Has Been Pegging Its Currency Is