Ch25. Fiscal policy is most effective in influencing aggregate demand
under a floating exchange-rate system with a low degree of capital
mobility.
Ch.25 A domestic monetary shock is least disruptive
under a fixed exchange-rate system without sterilization.
Ch.25 A domestic spending shock is...
Ch.25 Which of the following is a major drawback of the European Monetary
Union?
✓ Its inability to use monetary policies to address a recession that affects
some member countries but not others
Ch.25 Fiscal policy is most effective when capital is not mobile and the
country has fixed exchange rates.
✓ F
Ch.25 Internal monetary shocks cause less trouble with floating exchange
rates.
✓ F
Ch.25 Intervention to defend a fixed exchange rate can magnify the
transmission of a foreign recession into an economy.
✓ T
Ch.25 International capital-flow shocks tend to be less disruptive with floating
exchange rates than with fixed exchange-rates.
✓ T
Master01 | October, 2024/2025 | Latest update
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