If an economy has successful assigned policies under a fixed exchange regime, what will they have to do if they choose a new floating exchange regime?
A) Switch which agency is focused on internal vs. external balance.
B) nothing
C) Watch closely for signs of inflation which may trigger a policy misalignment problem.
D) The answer is dependent upon their level of capital mobility which is unknown.
A
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Under the purchasing-power-parity theory, if a certain market basket of identical goods costs $7,000 in the United States and 140,000 pesos in Mexico, the exchange rate should be ______.
a. $1 to 20 pesos b. $20 to 20 pesos c. $1 to 2 pesos d. $1 to 1 peso
Three equivalent ways to measure GDP are total ________, total ________, and total ________.
A. profits; production; saving B. production; income; expenditure C. investment; consumption; saving D. expenditure; income; profits
If in a market the last unit of output was sold at a price higher than marginal cost,
A) producers are better off producing more. B) consumers are better off if less of the product is sold. C) social welfare is not maximized. D) the unit increased total profit.
According to the ideas behind utilitarian justice, a dollar in the hands of a rich person is worth less than a dollar in the hands of a poor person.
Answer the following statement true (T) or false (F)