When the foreign exchange market determines the relative value of a currency, the country is adhering to a pegged exchange rate.
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In a customs union, trade barriers are eliminated among member countries and each country maintains its own external trade polices with nonmember countries. ( )
Linking neighboring countries economically and making them interdependent, creates incentives to increase political cooperation as well. ( )
A regional free trade agreement will benefit the world only when the amount of trade it diverts exceeds the amount of trade it creates. ( )
If the spot exchange rate is £1=$1. 50 when the market opens and £1=$1. 48 at the end of the day, the dollar has appreciated, the pound has depreciated. ( )