Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A)Monetary policy is a powerful economic tool for a country with fixed exchange rates and high capital mobility.
• B)Under floating exchange rates, external capital-flow shocks can have effects on internal balance by altering the exchange rate and the country's international competitiveness.
• C)Fiscal policy for a country with floating exchange rates is more powerful with a high degree of capital mobility than with a low degree of capital mobility.
• D)An expansionary monetary policy tends to increase the exchange rate value of the domestic currency in the short run.

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Definitions:

Economic Independence

The state of having sufficient personal wealth to live, without needing to depend on income from some form of employment.

Access Capital

The ability of a business or individual to obtain funds or resources needed for investment purposes.

Innovative Ideas

Novel and creative thoughts or concepts that have the potential to bring about change or solve problems.

First-mover Advantage

The competitive advantage gained by the initial significant occupant of a market segment.