Under Fixed Exchange Rates

question 7

Multiple Choice

Under fixed exchange rates,

• A) fiscal policy is ineffective in influencing national income with all degrees of International capital mobility.
• B) fiscal policy is most effective in influencing national income when capital is perfectly Mobile internationally.
• C) monetary policy is very effective in influencing national income if capital is perfectly Immobile internationally.
• D) monetary policy is more effective when capital is perfectly mobile internationally than when capital is perfectly immobile internationally.

---

Definitions:

Behavior Methods

Behavior methods involve techniques and strategies used in psychology and behavioral sciences to study and modify actions and reactions in subjects or patients.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.