Assuming the free flow of capital across borders, explain why a country that has a fixed exchange rate cannot have an independent monetary policy reaction curve.
What will be an ideal response?
We saw that a country that adopts a fixed exchange rate, for example fixing their currency to the U.S. dollar, then must adopt the monetary policy set by the FOMC. To ensure the stability of the exchange rate, the country will need to alter its real interest rate in line with FOMC changes. Over the long run, as inflation rates in the two countries converge, the monetary policy reaction function of the country should converge to that of the FOMC.
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In order to reduce labor supply, a union must be able to
a. do all of the following b. force all employers in the industry to hire only union members c. set wages d. agree to wage concessions e. increase union membership
With reference to the operations of the ABB Group discuss the functioning of matrix form organizations