If There Is a Fixed-Exchange-Rate System, Then in the Short

question 60

Multiple Choice

If there is a fixed-exchange-rate system, then in the short run described by the Mundell-Fleming model:

• A) the nominal exchange rate is fixed, but the real exchange rate is free to vary.
• B) the real exchange rate is fixed, but the nominal exchange rate is free to vary.
• C) both the nominal and real exchange rates are fixed.
• D) the nominal exchange rate is fixed, but whether the real exchange rate is fixed depends on whether the central bank follows a rule of constant growth of the money supply.

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Definitions:

Social Desirability Effect

The tendency of survey respondents to answer questions in a manner that will be viewed favorably by others, often leading to overreporting of "good" behavior or underreporting of "bad" behavior.

Survey Respondents

Individuals who answer or provide data in response to questions posed in a survey, which can be used for research or polling purposes.

Margin Of Error

The amount of inaccuracy allowed in the results of a survey or poll, often expressed as a percentage.

Public Opinion Survey

A method used to measure the opinions or attitudes of a population regarding specific issues or policies.