Given an Open Economy with High Capital Mobility,all of the Following

question 16

Multiple Choice

Given an open economy with high capital mobility,all of the following statements are true except:

• A) fiscal policy is strengthened under fixed exchange rates
• B) monetary policy is weakened under fixed exchange rates
• C) monetary policy is strengthened under floating exchange rates
• D) fiscal policy is strengthened under floating exchange rates

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Definitions:

Autokinetic Illusion

A visual perception phenomenon where a static light in a dark room appears to move because of small involuntary eye movements.

Tiny

A term used to describe something that is very small in size.

Constantly Shining Light

A continuous and uninterrupted emission of light from a source.

Monaural Clues

Auditory signals that can be perceived by one ear, helping in sound localization and identification.