Explain the cases for and against flexible and fixed exchange rate regimes
What will be an ideal response?
Case for fixed: cannot trust the central bank to pursue responsible monetary policy, reduces relative price variability by fixing E. Case for flexible: enables monetary policy to serve as a stabilization tool.
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Which of the following would be most likely to induce Congress and the president to conduct expansionary fiscal policy? A significant
A) decrease in oil prices. B) increase in consumption spending. C) decrease in investment spending. D) increase in net exports.
Which of the following did the 1986 Tax Reform Act not intended to do?
a. lower marginal tax rates b. broaden the tax base c. keep average tax rates the same d. reduce the bias towards saving
A government-inhibited good is one that
A) the political process has determined is socially undesirable. B) the political process has determined is socially desirable. C) freely competitive markets have determined is socially desirable. D) we want to encourage the consumption of.
In 2009, household spending was the smallest component of total spending in the U.S. economy
a. True b. False Indicate whether the statement is true or false