For this question, assume that the economy is operating in a fixed exchange rate regime and that perfect capital mobility exists. Given this information, which of the following will occur?
A) The domestic and foreign interest rates must be equal.
B) The central bank cannot use monetary policy to affect domestic output.
C) An expansionary fiscal policy will require that the central bank increase the money supply.
D) all of the above
E) none of the above
D
You might also like to view...
Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity. A) ii only B) iii only C) ii and iii D) i only E) i and ii
The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. The allocatively efficient quantity of pizza is ________ pizzas per day
A) 70 B) 10 C) more than 70 D) 40