Select the correct benefits and drawbacks to a Pegged exchange rate:
a. Supply and demand are market driven but governments can manipulate value by either printing money or removing currency from circulation.
b. Could be used to replace domestic currency if the currency is weak, financial institutions are suspicious, and the dollar is strong.
c. Could do very well if tied to a strong currency but suffers from vulnerability to other nation’s recession.
d. None of the answers are correct.
Ans: c
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