Which of the Following Is True

Multiple Choice

Which of the following is true?

A) Countries that want to have a fixed exchange-rate regime should be willing to refrain from policy changes that lead to large international capital flows.
B) For a floating exchange-rate to work for a country, it cannot have an inflation rate that is much above the inflation rate(s) of its primary trading partners.
C) Fixed exchange-rates encourage countries to have different goals, priorities and policies with respect to macroeconomic variables.
D) If capital is highly mobile, fiscal policy then loses its effectiveness under a fixed exchange rate.