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If a Country Starts with a Deficit in Its Official

Question 1

Multiple Choice

If a country starts with a deficit in its official settlements balance, intervention to defend a fixed exchange rate will cause:


A) the money supply to expand and the economy to grow.
B) both the money supply and the economy to contract.
C) the money supply to grow and the economy to contract.
D) the money supply to contract and the economy to grow.

Correct Answer:

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