With fixed exchange rates and capital mobility:
a. interest rates in the home country and in foreign countries are equalized.
b. interest rates in the home country are higher.
c. interest rates in foreign countries are higher.
d. monetary policy maintains its autonomy.
Ans: a. interest rates in the home country and in foreign countries are equalized.
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"Ceteris paribus" refers to the idea that if more than two variables are graphed, only one variable must be held constant
Indicate whether the statement is true or false
Two types of private solutions to the problem of externalities are
a. charities and the Golden Rule. b. charities and subsidies. c. the Golden Rule and taxes. d. taxes and subsidies.
The amount of pleasure or satisfaction derived from consumption of a good is called
A. demand. B. need. C. consumer surplus. D. utility.
Suppose the production function for a certain device is q = L + K. If a labor-saving technical change has occurred, which of the following could be the new production function?
A) q = L + 5K B) q = 5 ? (L + K) C) q = 5L + K D) All of the above are possible.