Multiple Choice
Which of the following statements regarding monetary policy is true?
A) Monetary policy is ineffective if a country has a fixed exchange rate.
B) Monetary policy is more effective if a country has a fixed exchange rate rather than a flexible exchange rate.
C) Monetary policy is equally effective whether a country has a fixed or a flexible exchange rate.
D) Monetary policy is very effective if a country has a fixed exchange rate in times of a recession but not during an inflationary boom.
Correct Answer:
Verified
Correct Answer:
Verified
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