A krone/euro peg alone is
A) not enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule.
B) enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule.
C) not enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule, provided fiscal policy will be used as well.
D) enough to provide automatic stability in the face of any monetary shocks that shift the AA schedule, provided the government runs a budget deficit.
E) enough to provide partial stability in the face of smaller monetary shocks that shift the AA schedule.
B
You might also like to view...
A firm's total revenue is equal to
a. total quantity produced times marginal cost. b. total quantity produced times market price. c. marginal revenue times total quantity produced. d. market price divided by total quantity produced.
Which of the following would lead to a leftward shift in the supply curve for Czech kroner?
a. A decrease in the dollar-krona exchange rate b. An increase in the Czech Republic's GDP relative to U.S. GDP c. Expectation that the dollar price of the krona will rise d. Stronger Czech interest in U.S. audio CDs e. An increase in the U.S. interest rate relative to the Czech interest rate.