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:

A State

A temporary psychological or physical condition that an individual or system is in at a given time.

B State

A term that might refer to a psychological or physiological condition of an individual at a specific time, often contrasted with "A State."

Opponent Process Theory

An explanatory framework in the fields of neurology and psychology that outlines how the recognition of colors is managed through the functioning of opposing neural networks.

Habituation

The process by which an organism decreases or stops its responses to a repetitive stimulus that neither rewards nor harms.