In an Open Economy with Global Capital Markets and Mobile

question 59

Multiple Choice

In an open economy with global capital markets and mobile capital:

• A)a country has control over both its domestic money supply and exchange rate.
• B)a country has control of either its domestic money supply or exchange, but not both.
• C)a country only has control over its domestic money supply.
• D)a country only has control over its exchange rate.

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Definitions:

Bankruptcy Proceedings

The judicial procedure that allows people or organizations that are unable to pay their debts to obtain relief from part or all of their financial obligations.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.

Refuses to Comply

The act of not agreeing to follow a request, rule, or order.

Ten or More Employees

A reference to a business or organization that has a workforce of ten or more individuals, often used in legal and regulatory contexts to determine applicability of certain rules.