Small nations whose trade and financial relationships are mainly with a single partner tend to utilize ?
Correct answer: A. pegged exchange rates
- A. pegged exchange rates
- B. freely floating exchange rates
- C. managed floating exchange rates
- D. crawling exchange rates
Explanation
A small country that trades mainly with one partner benefits from reducing exchange-rate uncertainty with that partner. It therefore commonly pegs its currency rather than allowing it to float freely.
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