In the 1990s, the Thai baht was pegged to the U.S. dollar at a rate of $1.00 = 25 baht. This is illustrated in the graph for U.S. dollars below. How could interest rates be used to maintain the pegged rate? Exchange Rate (baht/5) 50.0 33.3 25.0 Quantity of US Dollars Traded per Day O The Thai government and thc U.S. government could raise interest rates in Thailand and the U.S. by the same amounts. OThe Thai govemment could lower interest rates in Thailand. The U.S govemment could raise interest rates in the U.S. The Thai govermment could ra ites in Thailand.
In the 1990s, the Thai baht was pegged to the U.S. dollar at a rate of $1.00 = 25 baht. This is illustrated in the graph for U.S. dollars below. How could interest rates be used to maintain the pegged rate? Exchange Rate (baht/5) 50.0 33.3 25.0 Quantity of US Dollars Traded per Day O The Thai government and thc U.S. government could raise interest rates in Thailand and the U.S. by the same amounts. OThe Thai govemment could lower interest rates in Thailand. The U.S govemment could raise interest rates in the U.S. The Thai govermment could ra ites in Thailand.
Chapter1: Making Economics Decisions
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Transcribed Image Text:In the 1990s, the Thai baht was pegged to the U.S. dollar at a rate of $1.00 = 25 baht. This is
illustrated in the graph for U.S. dallars below. How could interest rates be used to maintain the
pegged rate?
Exchange Rate
(baht S)
50.0
33.3
25.0
D
Quantity of US Dollars Traded per Day
O The Thai government and the U.S. govemment could raise interest rates in
Thailand and the U.S. by the same amounts.
O The Thai government could lower interest rates in Thailand.
The U.S. govermment could raise interest rates in the U.S.
The thai governiment could rase it
rates in Thailand
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