Which of the following statements is true?
A. International capital-flow shocks have domestic effects under fixed exchange rates but not under floating exchange rates.
B. A domestic monetary shock is less disruptive with floating exchange rates.
C. With floating exchange rates, the transmission of business cycles through foreign trade and repercussion is less than with fixed exchange rates.
D. If foreign capital is highly responsive to changes in interest rates, then domestic spending shocks are less disruptive with fixed exchange rates.
Answer: C
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A country can have a negative balance of trade and a positive balance of goods and services
a. True b. False Indicate whether the statement is true or false
The unemployment rate may underestimate the true extent of unemployment if: a. many part-time employees would like to work full-time, but are unable to get the additional work. b. employees increase the number of hours they work overtime
c. there are a large number of people working in the underground economy. d. any of the above occur.