Under a floating exchange-rate regime
A. monetary policy must be used to manage the exchange rate.
B. the changes in the exchange rate can take care of external balance, leaving macroeconomic policy to take care of internal balance.
C. only fiscal policy should be used to reconcile the goals of internal and external balance.
D. deficits and surpluses in the official settlements balance will be the primary concern of policy makers.
Answer: B
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Which of the following would be the source of a "real" business cycle?
A) changes in technology B) anticipated expansionary monetary policy C) unanticipated contractionary monetary policy D) unanticipated expansionary monetary policy
If labor's share of national income is to remain constant, then ________
A) the real wage must grow faster than labor productivity B) the real wage must grow at the same rate as labor productivity C) labor productivity must grow faster than the real wage D) the combined growth rates of labor productivity and the real wage must equal the growth rate of national income