Which of the following was part of the reason for the European excha.pdf
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The document discusses the reasons for the European exchange rate crisis of 1992, identifying the need for the German mark to appreciate against other European currencies as a significant factor. It highlights high interest rates in Germany as contributing to this necessity. Option (a) is deemed the correct answer to the posed question.
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Which of the following was part of the reason for the European excha.pdf
- 1. Which of the following was part of the reason for the European exchange rate crisis of 1992? Select one: a. the need for the German mark to appreciate relative to other European currencies b. the high interest rate in non-German countrie c. the need to maintain a roughly fixed nominal exchange rate in the face of relatively high inflation d. the need for a smaller German budget deficit after German reunification e. the need for the British pound to be tied to gold Solution The need for the German mark to appreciate relative to other European currencies due to high interest rate in Germany was one of the reason for European echange rate. So option (a) is correct.