Suppose that country a pegs its currency to the currency of, Ask an Expert

Economics

Suppose that country A pegs its currency to the currency of country B. Which of the following will NOT be a benefit of this arrangement to country A?

increased capital flows between the two countries because of increased certainty of future exchange rates

lower costs of economic transactions costs between the two countries, leading to welfare gains for country A.

lower transactions costs for A to conduct international trade with country B

decreased migration between the two countries because of increased certainty of future exchange rates

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91678012

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