If an economy has successful assigned policies under a fixed exchange regime, what will they have to do if they choose a new floating exchange regime?
A) Switch which agency is focused on internal vs. external balance.
B) nothing
C) Watch closely for signs of inflation which may trigger a policy misalignment problem.
D) The answer is dependent upon their level of capital mobility which is unknown.
A
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In the short run, a perfectly competitive firm may earn economic profits that are
a. positive. b. positive but very small. c. negative. d. all of the above.
Other things the same, a decrease in the price level makes consumers feel
a. less wealthy, so the quantity of goods and services demanded falls. b. less wealthy, so the quantity of goods and services demanded rises. c. more wealthy, so the quantity of goods and services demanded rises. d. more wealthy, so the quantity of goods and services demanded falls.