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Under the Pure Flexible Exchange Rate Regime

Question 20

Multiple Choice

Under the pure flexible exchange rate regime,


A) the combined balance on the current and capital accounts will be equal in size,but opposite in sign,to the change in the official reserves.
B) the balance on the current and capital accounts will be equal in size,but opposite in sign.
C) a current account surplus or deficit must be matched by an official reserves deficit or surplus.
D) a capital account surplus or deficit must be matched by an official reserves deficit or surplus.

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