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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