Multiple Choice
If a country chooses to have free capital flows and to maintain a fixed exchange rate, then it must:
A) live with exchange-rate volatility.
B) restrict its citizens from participating in world financial markets.
C) give up the use of monetary policy for purposes of domestic stabilization.
D) give up the use of fiscal policy for purposes of domestic stabilization.
Correct Answer:
Verified
Correct Answer:
Verified
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