Complete the Following Statement, "With a Fixed Exchange Rate, and Perfect

Multiple Choice

Complete the following statement, "With a fixed exchange rate, and perfect capital mobility, the
______________ must match _________ to prevent massive capital flows and allow equilibrium in the
Foreign exchange market."

A) domestic trade balance, a competitor's trade balance
B) domestic growth, a competitor's growth
C) domestic interest rates, foreign interest rates
D) domestic inflation, a competitor's inflation