Economics 9708 · AS & A Level · 6.4

6.4 — practice question

Which combination shows that a country is using a ‘dirty float’?

  • Anominal exchange rate: depreciates by 20%; foreign currency reserves: decrease by $1 billion
  • Bnominal exchange rate: depreciates by 20%; foreign currency reserves: unchanged
  • Cnominal exchange rate: unchanged; foreign currency reserves: decrease by $1 billion
  • Dnominal exchange rate: unchanged; foreign currency reserves: unchanged

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