Under a Flexible Exchange Rate System,which Policies Can Be Used

question 12

Multiple Choice

Under a flexible exchange rate system,which policies can be used to achieve internal balance?

• A)Monetary policies alone
• B)Fiscal policies alone
• C)Neither monetary nor fiscal policies
• D)Both monetary and fiscal policies

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Definitions:

Opportunity Cost

The price paid when one opts not to pursue the next most favorable choice during decision-making.

Cash Outlay

The actual amount of money spent or disbursed on goods, services, or assets.

Alternative Investments

Investments in asset classes other than stocks, bonds, and cash, including real estate, hedge funds, private equity, and commodities.

Discontinuing

The process of ending the manufacture, support, or offering of a product or service.