Although it is a member of the European Community, Denmark is not part of the eurozone; it

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Although it is a member of the European Community, Denmark is not part of the eurozone; it has its own currency, the krone. Because the krone is pegged to the euro, Denmark's central bank is obliged to maintain the value of the krone within 2.25 percent either above or below the value of the euro. To maintain the peg with the euro, in 2015 the Danish central bank was forced to offer negative interest rates on deposits of krone that it held. Was the Danish central bank's action in response to an increase or a decrease in the value of the euro? Briefly explain.
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Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

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