In the Monetary Small Open-Economy Model with a Fixed Exchange

question 35

Multiple Choice

In the monetary small open-economy model with a fixed exchange rate, the domestic

• A)central bank loses control over the price level.
• B)central bank loses control over the domestic stock of money.
• C)government loses control over the level of domestic government spending.
• D)government loses control over the level of domestic government spending and domestic taxes.
• E)government loses control over the level of domestic taxes.

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Definitions:

Normally Distributed

Describes a distribution that follows a normal curve or bell curve, where most observations cluster around the central peak and the probabilities for values further away from the mean taper off equally in both directions.

Sampling Distribution

The distribution pattern of probabilities for a specified statistic obtained from a random sample.

Normally Distributed

A data distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Sampling Distribution

A probability distribution of a statistic obtained through a large number of samples drawn from a specific population.