Which One of the Following Statements Is the MOST Accurate

question 65

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) Under a fixed exchange rate, central bank monetary tools are powerless to affect the economy's money supply.
• B) Under a flexible exchange rate, central bank monetary tools are powerless to affect the economy's money supply or its output.
• C) Under a fixed exchange rate, fiscal policy tools are powerless to affect the economy's money supply or its output.
• D) Under a fixed exchange rate, central bank monetary tools are powerless to affect the economy's money supply or its output.
• E) Under a dirty float exchange rate, central bank monetary tools are powerless to affect the economy's money supply or its output.

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Definitions:

Covert Influence

The subtle or hidden exertion of control or persuasion over others’ decisions or behavior without their explicit awareness.

Manipulation And Cooption

Strategies used to influence or control others' actions or decisions subtly and, sometimes, unethically.

Explicit And Implicit Coercion

The use of direct threats or force to influence actions (explicit) and the subtler pressure exerted through social norms or expectations (implicit).

Shared Power Strategy

An approach to leadership and decision-making that involves distributing power and authority within a group or organization, fostering collaboration and empowerment.