Suppose a country that has been pegging its currency is faced ...

[strangeaffliction]

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

Question 2

Which of the following will likely cause a reduction in output per worker?
 
  A) a reduction in education expenditures
  B) a reduction in the saving rate
  C) a reduction in on-the-job training
  D) all of the above

[orangecrush]

Answer to Question 1

A

Answer to Question 2

D

[strangeaffliction]

Excellent

[Liddy]

TYSM