In an open economy with fixed exchange rates, monetary policy is most effective at increasing real income if
A) capital mobility is high.
B) capital mobility is low.
C) capital mobility is perfect.
D) monetary policy is ineffective with fixed exchange rates.
D
You might also like to view...
When average costs of production are falling, average cost:
a. is higher than marginal cost. b. is equal to price. c. is negative. d. is less than marginal cost.
Firms in perfectly competitive markets take the ______ as given when deciding how much to sell.
A. market quantity B. lowest prices C. market prices D. input prices
Cattle manure is an input often used in making fertilizer. Suppose a technique is discovered that can transform cattle manure into quality gasoline. What would happen in the fertilizer industry?
Which of the following situations could generate a shortage?
A. Demand for a good increases, resulting in a new higher market clearing price. B. Demand for a good decreases, resulting in a new lower market clearing price. C. Demand for a good decreases, but the price is not permitted to fall. D. Demand for a good increases, but the price is not permitted to rise.