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Fiscal Policy Is Most Effective in Influencing Aggregate Demand

Question 10

Multiple Choice

Fiscal policy is most effective in influencing aggregate demand:


A) under a floating exchange-rate system with a low degree of capital mobility.
B) under a fixed exchange-rate system with sterilization.
C) under a fixed exchange-rate system without sterilization.
D) under a floating exchange-rate system with a high degree of capital mobility.

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