In an open economy (as compared to a closed one, without international trade)
A. monetary policy is weaker, fiscal policy is more powerful
B. fiscal policy is weaker, monetary policy is more powerful
C. both monetary and fiscal policy are more powerful
D. both monetary and fiscal policy are weaker
Ans: B. fiscal policy is weaker, monetary policy is more powerful
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Given free mobility of people, wage differentials will contribute to long-term wage disparities among regions
Indicate whether the statement is true or false
Which of the following is true regarding value, transaction costs, and exchange?
a. Middlemen can be viewed as agents who create value by reducing transaction costs and, thereby, facilitating gains from exchange. b. Middlemen fail to create value since they do not expand the supply of physical goods. c. A good or service has a given value regardless of who uses it or how it is used. d. Voluntary exchange reduces value by channeling goods into the hands of people who value them least.