Which of the Following Is NOT True with Fixed Exchange

question 35

Multiple Choice

Which of the following is NOT true with fixed exchange rates and perfect capital mobility?

• A)Monetary policy is not effective in either the long-run or the short-run.
• B)Sterilization is impossible.
• C)Fiscal policy is very powerful.
• D)Monetary policy is very powerful.

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Definitions:

Telescoping Gauges

Measuring instruments used to determine the internal size of a hole, slot, or similar feature, capable of adjusting to the size within a specified range.

Thrustline

The imaginary line in a vehicle that represents the direction of the force that is applied to propel the vehicle forward.

Dog-tracking

A condition where a vehicle's rear alignment is off-center compared to the front, causing it to move diagonally down the road.

Perpendicular

At right angles to.