Assuming the free flow of capital across borders, if country A wants to fix its exchange rate with country B, then:
A. country A's monetary policy will not be able to be used to address domestic issues.
B. country A's monetary policy must be conducted so the inflation rate in country A matches the inflation rate in country B.
C. country A's inflation rate will have to match country B's.
D. all of the answers given are correct.
Answer: D
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