Under a ?Xed Exchange Rate Regime, ?Scal Policy Is

question 82

Multiple Choice

Under a ?xed exchange rate regime, ?scal policy is:

• A) less effective than monetary policy because the central bank prints money to counter in?ation.
• B) more effective than monetary policy because the central bank cannot change interest
• C) less effective than monetary policy as the central bank increases interest rates to counter in?ationary pressures.
• D) more effective than monetary policy because exchange rate differentials are offset by

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