Internal Shocks to an Economy with a Fixed Exchange Rate

Multiple Choice

Internal shocks to an economy with a fixed exchange rate will:

A) have the same types of impacts as monetary and fiscal policy changes.
B) have no impact on the domestic economy but will lead to external imbalances.
C) have no impact on both the country's internal balance and the country's balance of payments.
D) have no impact on the country's internal balance but will change the country's balance of payments.