Given an Open Economy with High Capital Mobility,all of the Following

question 16

Multiple Choice

Given an open economy with high capital mobility,all of the following statements are true except:

• A) fiscal policy is strengthened under fixed exchange rates
• B) monetary policy is weakened under fixed exchange rates
• C) monetary policy is strengthened under floating exchange rates
• D) fiscal policy is strengthened under floating exchange rates

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Definitions:

Hours

A time unit equal to 60 minutes, used to measure duration.

Dimensional-Analysis

A technique in physics and engineering used to convert one set of measurements to another, ensuring that the mathematical equation relationships remain consistent.

Conversion Factor

A numerical value used to convert a quantity expressed in one unit to the equivalent quantity expressed in another unit.

Pounds

A unit of weight commonly used in the United States, equivalent to 0.453592 kilograms.