with a floating exchange rate a monetary policy is not indep

with a floating exchange rate:
a) monetary policy is not independent
b) an independent fiscal policy cannot be used
c) monetary policy is ineffective
d) a central bank can use an independent monetary policy

Solution

c) monetary policy is ineffective

Due to influence of balance of payment on money multiplier, the monetary policy is ineffective in case of floating exchange rate.

with a floating exchange rate: a) monetary policy is not independent b) an independent fiscal policy cannot be used c) monetary policy is ineffective d) a centr

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