A domestic spending shock is likely to be least disruptive under a
A. fixed exchange-rate system when there is high capital mobility.
B. floating exchange-rate system when there is low capital mobility.
C. fixed exchange-rate system without sterilization.
D. floating exchange-rate system when there is high capital mobility.
Answer: D
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In the United States, there is a federal minimum wage that is followed by each state
a. True b. False Indicate whether the statement is true or false
A traditional definition of recession is
a) any GDP gap which persists for 9 months or more b) deflation or a slowing of the inflation rate for one year or more c) a temporary shock to the economy resulting in the need for fiscal or monetary stimulus d) at least two successive quarters of positive unemployment e) negative GDP growth for half a year or more
What causes a decrease in income in this graph?
a. The total of areas d + f is less than the total of areas e + d.
b. The total of areas d + f is more than the total of areas e + d.
c. The total of areas e + f is less than the total of areas e + d.
d. The total of areas e + f is more than the total of areas e + d.
The larger the value of the marginal propensity to save (MPS)
A. the smaller is the value of the multiplier. B. the larger is the value of autonomous consumption. C. the larger is the value of the marginal propensity to consumption (MPC). D. the larger is the value of the multiplier.