Under a Fixed Exchange Rate System and a Neutral Monetary

question 91

Multiple Choice

Under a fixed exchange rate system and a neutral monetary policy, an expansionary fiscal policy will be reinforced by an open economy because of the resultant capital _____ U.S. capital markets, which _____ interest rates.

• A) outflow from; reduces
• B) outflow from; increases
• C) inflow to; reduces
• D) inflow to; increases

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Definitions:

Merge

To combine or unite multiple entities, such as companies or datasets, into one integrated whole.

Short-form Merger

A short-form merger is a type of merger that allows a parent company to absorb a subsidiary without the approval of the shareholders of the subsidiary.

Shareholder Approval

The process by which a corporation's shareholders vote on and approve certain corporate actions or decisions.

Revised MBCA

An updated version of the Model Business Corporation Act, which provides a template for state laws regulating the formation, operation, and dissolution of corporations.