Under a Fixed-Exchange-Rate System,monetary Policy

question 170

Multiple Choice

Under a fixed-exchange-rate system,monetary policy

• A) can only be used to stabilize the domestic economy.
• B) can only be used to stabilize the market equilibrium value of the exchange rate.
• C) cannot be used.
• D) can be used to stabilize the domestic economy or the market equilibrium value of the exchange rate,but not both.
• E) can be used to stabilize both the domestic economy and the market equilibrium value of the exchange ratE.

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Definitions:

Self-reward

A personal incentive one gives oneself as a form of recognition for achieving a goal or completing a task.

Left-brain Thinking

Logical, analytical, and objective thought processes associated with the left hemisphere of the brain.

Conceptual Age

A period in human history characterized by the value of creativity, empathy, and conceptual thinking in the economy.

Fear

An unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat.