Economic theory and experience since 1973 indicate that, under floating exchange rates, a country's fiscal and monetary policies in the short-run and the long-run can
A) have both domestic and foreign economic impact.
B) have domestic or foreign economic impact, but not both.
C) have domestic but not foreign economic impact.
D) have foreign but not domestic economic impact.
E) have neither domestic nor foreign economic impact.
A
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When a transfer price increases
a. the buying division will want to sell less to the selling division b. the buying division will want to sell more to the selling division c. the selling division will want to sell less to the buying division d. the selling division will want to sell more to the buying division
Suppose Cassie's Candles is a profit-maximizing competitive firm. Cassie sells hand-made candles for $10 each. She will pay an hourly wage of $20 so long as the marginal productivity of a worker equals or exceeds two candles per hour
a. True b. False Indicate whether the statement is true or false
The supply and demand for saving are brought into equilibrium by adjustments of the ________ rate.
A. nominal interest B. discount C. real interest D. dividend
Assume that the interest parity holds and that the dollar is expected to depreciate against the pound. Given this information, we know that
A) U.S. and U.K. interest rates are equal. B) the U.S. interest rate exceeds the U.K. interest rate. C) the U.K. interest rate exceeds the U.S. interest rate. D) individuals will prefer to hold U.S. bonds because the U.S. interest rate exceeds the U.K. interest rate. E) none of the above