Multiple Choice
Assume that the exchange rates are fixed. When money demand is less sensitive to interest rate changes than are international capital flows, _____ policy will be _____ effective than when money demand is more sensitive to interest changes than are international capital flows.
A) expansionary fiscal; more
B) expansionary fiscal; less
C) expansionary monetary; more
D) sterilized intervention; more
Correct Answer:
Verified
Correct Answer:
Verified
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