Economic Theory and Experience Since 1973 Indicate That, Under Floating

question 50

Multiple Choice

Economic theory and experience since 1973 indicate that, under floating exchange rates, a country's fiscal and monetary policies in the short run and the long run can

• A) have both domestic and foreign economic impact.
• B) have domestic or foreign economic impact, but not both.
• C) have domestic but not foreign economic impact.
• D) have foreign but not domestic economic impact.
• E) have neither domestic nor foreign economic impact.

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Definitions:

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies and to reflect this in the profit and loss statement proportionally to their ownership level.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not fully control the company, typically 20%-50% ownership.

Proportionate Share

An individual's or entity's part or share of something in relation to the whole, usually expressed as a percentage.