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| Q. |
Under fixed exchange rate, which one of the following statements is the most accurate? |
| A. | Devaluation causes a decrease in output, a decrease in official reserves, and a contraction of the money supply. |
| B. | Devaluation causes a rise in output, a rise in official reserves, and an expansion of the money supply. |
| C. | Devaluation causes a rise in output and a rise in official reserves. |
| D. | Devaluation causes a rise in output and an expansion of the money supply. |
| Answer» B. Devaluation causes a rise in output, a rise in official reserves, and an expansion of the money supply. | |
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