Decreases in autonomous spending have a contractionary effect and make ________ levels of real income consistent with a given interest rate

An expansionary fiscal policy is usually employed by the government to close an expansionary gap in the economy

Indicate whether the statement is true or false

Which of the following statements is accurate?

A. Fixed exchange rates greatly constrain a country's ability to pursue an independent monetary policy. B. Fiscal policy is highly effective with fixed exchange rates and unresponsive international capital flows. C. Contractionary monetary policy is effective under a fixed exchange-rate regime. D. Fiscal policy is not effective with fixed exchange rates in an environment of highly responsive international capital flows.