Internal shocks to an economy with a fixed exchange rate will
A. have no impact on the domestic economy but will lead to external imbalances.
B. have the same types of impacts as monetary and fiscal policy changes.
C. have no impact on the country's internal balance but will change the country's balance of payments.
D. have no impact on both the country's internal balance and the country's balance of payments.
Answer: B
You might also like to view...
A change in the dollar price of yen from $1 = 100 yen to $1 = 50 yen will:
A. make U.S. goods more expensive to the Japanese. B. make Japanese goods less expensive to Americans. C. increase U.S. exports and depress Japanese exports. D. increase Japanese exports and depress U.S. exports.
Increases in investment exceed increases in output because of the multiplier effect
Indicate whether the statement is true or false
Figure 5-5 shows a consumer budget line for French fries and hamburgers. The household allocates a budget for these two goods. If the price of an order of french fries is $2, how much income is allocated to fries and burgers combined?
A. $2 B. $4 C. $10 D. $20
The table above shows the balance sheet for Ralph's Bank. If the desired reserve ratio is 15 percent, Ralph's Bank has excess reserves of ________
A) $50 B) $500 C) $450 D) $2,500