For This Question,assume That Policy Makers Are Pursuing a Fixed

question 26

Multiple Choice

For this question,assume that policy makers are pursuing a fixed exchange rate regime.Now suppose that a reduction in stock market wealth causes a decrease in consumption.Which of the following will tend to occur in a fixed exchange rate regime?

• A)a reduction in Y
• B)a reduction in the money supply
• C)no change in the domestic interest rate
• D)all of the above

---

Definitions:

Posterior

Pertaining to the back side of the body or an organ, opposite of anterior.

Coracobrachialis

A muscle in the shoulder that helps in flexing and adducting the arm.

Pectoralis Major

A large muscle in the upper chest that functions in the movement of the shoulder and upper arm.

Deltoid

A large, triangular muscle covering the shoulder joint and responsible for lifting and rotating the arm.