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With Floating Exchange Rates, the Effects of International Trade Shocks

Question 34

Multiple Choice

With floating exchange rates, the effects of international trade shocks on internal balance are _____ by the effects of the resulting change in the _____.


A) not mitigated; LM curve.
B) not mitigated; exchange rate.
C) mitigated; LM curve.
D) mitigated; exchange rate.

Correct Answer:

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