Under a floating exchange-rate regime
A. monetary policy must be used to manage the exchange rate.
B. the changes in the exchange rate can take care of external balance, leaving macroeconomic policy to take care of internal balance.
C. only fiscal policy should be used to reconcile the goals of internal and external balance.
D. deficits and surpluses in the official settlements balance will be the primary concern of policy makers.
Answer: B
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