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1) You are hired as a consultant to the central bank for a country that has for many years suffered from repeated currency crises and

1) You are hired as a consultant to the central bank for a country that has for many years suffered from repeated currency crises and depends heavily on the U.S. financial and product markets. Which of the following policies would have the greatest effectiveness for reducing currency volatility of the client country with the United States. a. dollarization b. an exchange rate pegged to the U.S. dollar c. an exchange rate with a fixed price per ounce of gold d. an internationally free floating exchange rate e. none of the above 2) Which of the following is true for the IMF (International Monetary Fund) and the World Bank? a. Sources of fund for the IMF is sale of debt instruments, whereas it is member contribution for the World Bank b. The IMF is non-profit oriented c. They are both established to promote world trade d. b and c e. all of the above

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