Which of the Following Statements Is (Are)correct

question 2

Multiple Choice

Which of the following statements is (are) correct?

• A)Under a fixed exchange rate system,potential conflicts arise between the goals of internal balance and external balance.
• B)With a fixed exchange rate system,a central bank has to give up control over domestic interest rates but retains control over inflation.
• C)Countries may find that expansionary policies,which might be desired in order to reduce the unemployment rate,may lead to income levels that are too low to balance the trade account and could lead to balance of payments surpluses.
• D)Both a and c
• E)Both b and c

---

Definitions:

Batholith

a large mass of intrusive igneous rock believed to have solidified deep beneath the Earth's surface.

Deep Batholithic Rocks

Large masses of intrusive igneous rock, originating deep within the Earth's crust, that have solidified from magma over millions of years.

Continent-Continent Collision

This term refers to the process in which two continental plates collide, leading to the formation of mountain ranges.

Hot Spot

A hot spot is a volcanic region thought to be fed by underlying mantle that is anomalously hot compared with the surrounding mantle.