Why does the GG schedule have a positive slope?
A) The monetary efficiency gain a country gets by joining a fixed exchange rate area falls as its economic integration with the area increases.
B) The monetary efficiency gain a country gets by joining a fixed exchange rate area rises as its economic integration with the area decreases.
C) The monetary efficiency gain a country gets by joining a fixed exchange rate area rises as its economic integration with the area increases.
D) The monetary efficiency gain a country gets by joining a floating exchange rate area rises as its economic integration with the area increases.
E) The monetary efficiency gain a country gets by joining a fixed exchange rate area is constant after their integration into the area.
C
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The claim that increases in the growth rate of the money supply increase nominal interest rates but not real interest rates is known as the
a. Friedman Effect. b. Hume Effect. c. Fisher Effect. d. the inflation tax.
All externalities:
A. create either a cost or benefit to a person other than the person who caused it. B. are harmful to society and create costs external to the decision maker. C. are addressed by the government through taxation. D. are beneficial to society and create benefits external to the decision maker.