In the monetary small open-economy model, a flexible exchange rate insulates the domestic price level from
A) both real and nominal shocks from abroad.
B) real shocks from abroad, but not from nominal shocks from abroad.
C) nominal shocks from abroad, but not from real shocks from abroad.
D) neither real nor nominal shocks from abroad.
C
Economics
You might also like to view...
If the government of a country decides to increase the required reserve ratio from 10 to 12.5 percent, the value of the money multiplier will: decrease from 10 to 8. a. increase from 1.0 to 1.2. b. decrease from 10 to 8
c. increase from 10 to 12. d. decrease from 12 to 10.
Economics
The Council of Economic Advisers
a. was created in 1946. b. advises the president of the United States on economic policy matters. c. writes the annual Economic Report of the President. d. All of the above are correct.
Economics