Fixed exchange rate and unrestricted capital flows

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Reference no: EM13774262

Suppose that a country has a fixed exchange rate and unrestricted (financial) capital flows. Which of the following would the country NOT experience?

A. Rising interest rates.

B. A stock market crash.

C. The withdrawal of foreign (financial) capital.

D. An appreciation of the nominal exchange rate.

E. All of the above.

F. None of the above; they are all possible.

Reference no: EM13774262

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