If a Country Moves from Fixed to Flexible Exchange Rates

question 15

Multiple Choice

If a country moves from fixed to flexible exchange rates, its macroeconomic policy

• A) is no longer restricted.
• B) is restricted, as it can only use fiscal policy to achieve its economic goals.
• C) is restricted, as it can only use monetary policy to achieve its economic goals.
• D) must follow policy directives from the IMF.

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Definitions:

Well-Learned Responses

Reactions or behaviors that have been practiced and reinforced over time, becoming automatic or habitual.

Social Loafing

is the phenomenon where individuals exert less effort to achieve a goal when they work in a group compared to when they work alone.

Well-Learned Responses

Behaviors that have become automatic or habitual through repeated practice or reinforcement.

Social Loafing

A phenomenon in which individuals decrease their effort when working in a group compared to when working alone.