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The Assignment Rule Says That, with Fixed Exchange Rates, Fiscal

question 53

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The assignment rule says that, with fixed exchange rates, fiscal policy should be used to stabilize the balance of payments and monetary policy should be used to stabilize the domestic economy.


Definitions:

Participant

A person who takes part in something, such as an experiment or study.

Neighbor

Someone living in close proximity to another or a member of the same community or area.

Temporal Discounting

In decision making, the greater weight given to the present over the future.

Certainty Effect

A cognitive bias where people give greater weight to outcomes that are certain, compared to outcomes that are only probable.

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