When the Exchange Rate Is

question 48

Multiple Choice

When the exchange rate is

• A) flexible, purposeful stabilization is more difficult because monetary policy has no power at all to affect domestic output and employment.
• B) fixed, purposeful stabilization is less difficult because monetary policy has no power at all to affect domestic output and employment.
• C) fixed, purposeful stabilization is more difficult because monetary policy has no power at all to affect domestic output and employment.
• D) a crawling peg, rather than fixed, purposeful stabilization is more difficult because monetary policy has no power at all to affect domestic output and employment.
• E) fixed rather than crawling peg purposeful stabilization is more difficult because fiscal policy has no power at all to affect domestic output and employment.

---

Definitions:

$7 Per Hour

A specified wage rate where an individual or worker is paid seven dollars for each hour worked.

Purchasing Power

The economic value of a currency depicted by the number of goods or services obtainable by a single monetary unit.

US$ Per C$

The exchange rate that defines how much one can buy in US dollars (US$) with one Canadian dollar (C$).

Importer

An individual or organization that buys goods or services from a foreign country for use in their own country.