Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) Monetary policy is a powerful economic tool for a country with fixed exchange rates and high capital mobility.
B) Under floating exchange rates, external capital-flow shocks can have effects on internal balance by altering the exchange rate and the country's international competitiveness.
C) Fiscal policy for a country with floating exchange rates is more powerful with a high degree of capital mobility than with a low degree of capital mobility.
D) An expansionary monetary policy tends to increase the exchange rate value of the domestic currency in the short run.