Which of the Following Statements Is Accurate

question 12

Multiple Choice

Which of the following statements is accurate?

• A)Fiscal policy is not effective with fixed exchange rates in an environment of highly responsive international capital flows.
• B)Fiscal policy is highly effective with fixed exchange rates and unresponsive international capital flows.
• C)Fixed exchange rates greatly constrain a country's ability to pursue an independent monetary policy.
• D)Contractionary monetary policy is effective under a fixed exchange rate regime.

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Definitions:

Benefits

Advantages or positive outcomes that arise from a particular action, product, or service.

Tangible

Refers to physical items or properties that can be seen, touched, and measured.

Measurable

Able to be measured or represented using numbers.

Assess

To assess or determine the characteristics, capacity, or value of something.