In the Monetary Small Open-Economy Model, a Flexible Exchange Rate

question 65

Multiple Choice

In the monetary small open-economy model, a flexible exchange rate insulates the domestic price level from

• A) both real and nominal shocks from abroad.
• B) real shocks from abroad, but not from nominal shocks from abroad.
• C) nominal shocks from abroad, but not from real shocks from abroad.
• D) neither real nor nominal shocks from abroad.
• E) increases in foreign interest rates, but not from increases in foreign price levels.

---

Definitions:

Phosphorylation

Reaction in which a phosphate group is added to a molecule.

Gated Transporters

Membrane proteins that regulate the passage of substances in and out of cells or organelles, operating gates that open or close in response to specific signals.

Concentration Gradient

A variation in the concentration of a substance across a distance, often leading to diffusion from an area of higher concentration to one of lower concentration.

First Law

Without a specific context, "First Law" could refer to various foundational laws in different fields, such as Newton's First Law of motion that states an object will remain at rest or in uniform motion in a straight line unless acted upon by an external force.