Suppose a Country Is Pursuing a Fixed Exchange Rate Regime

Multiple Choice

Suppose a country is pursuing a fixed exchange rate regime with imperfect capital mobility.The ability of that country to move its domestic interest rate while maintaining its exchange rate will depend on

A) the degree of development of its financial markets.
B) the degree of capital controls.
C) the amount of foreign exchange it holds.
D) all of the above
E) both A and B