For This Question,assume That the Economy Is Operating in a Fixed

Multiple Choice

For this question,assume that the economy is operating in a fixed exchange rate regime and that perfect capital mobility exists.Given this information,which of the following will occur?

A) The domestic and foreign interest rates must be equal.
B) The central bank cannot use monetary policy to affect domestic output.
C) An expansionary fiscal policy will require that the central bank increase the money supply.
D) all of the above
E) none of the above