Because Many Emerging Market Countries Have Not Developed the Political

question 54

Multiple Choice

Because many emerging market countries have not developed the political or monetary institutions that allow the successful use of discretionary monetary policy

• A)they have little to gain from pegging their exchange rate to an anchor country like the U.S. or Germany.
• B)they have little to gain from using a nominal anchor,because it would mean a monetary policy that is overly expansionary.
• C)they have very little to gain from an independent monetary policy,but a lot to lose.
• D)they would be better off giving their central bankers the independence to use discretion,rather than take their discretion away through any nominal anchor.

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