Fixed exchange rate regime

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Reference no: EM131097601

There is a fixed exchange rate regime. Assuming that all accounts are balanced in the balance of payments, a sale of a local enterprise to a foreign buyer will create:

(a) A surplus in the capital account which will lead to an increase in reserves;

(b) A surplus in the capital account which will lead to a fall in reserves;

(d) A deficit in the capital account which will lead to a fall in reserves.

Reference no: EM131097601

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