If a country moves from fixed to flexible exchange rates, its macroeconomic policy
A. is restricted, as it can only use fiscal policy to achieve its economic goals.
B. must follow policy directives from the IMF.
C. is restricted, as it can only use monetary policy to achieve its economic goals.
D. is no longer restricted.
Answer: D
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Use the following table to answer the next question.Interest RateTransaction Demand for MoneyAsset Demand for MoneyMoney Supply2%$220$300$46042202804606220260460822024046010220220460The equilibrium interest rate is
A. 4%. B. 2%. C. 8%. D. 6%.
Why are foreign investors more likely to invest in U.S. government bonds than in U.S. corporate stocks and bonds?
What will be an ideal response?
State the law of demand and illustrate it. Explain what is meant by the term "price" in the law of demand
What will be an ideal response?
Changes in relative prices create substitution effects
a. True b. False Indicate whether the statement is true or false