Question:
Which of the following statements are correct?
A. Under fixed exchange rates and perfect capital mobility, a country cannot pursue an independent monetary policy.
B. Under flexible exchange rates and perfect capital mobility, a country can not pursue independent fiscal policies.
C. Under fixed exchange rates and perfect capital mobility, fiscal expansion is extremely effective.
D. Under flexible exchange rate and perfect capital mobility, a country can pursue an independent monetary policy.
E. Both under fixed and flexible exchange rates, there are no constraints on pursuing fiscal or monetary policies independently.
Choose the correct answer from the options given below:
Which of the following statements are correct?
A. Under fixed exchange rates and perfect capital mobility, a country cannot pursue an independent monetary policy.
B. Under flexible exchange rates and perfect capital mobility, a country can not pursue independent fiscal policies.
C. Under fixed exchange rates and perfect capital mobility, fiscal expansion is extremely effective.
D. Under flexible exchange rate and perfect capital mobility, a country can pursue an independent monetary policy.
E. Both under fixed and flexible exchange rates, there are no constraints on pursuing fiscal or monetary policies independently.
Choose the correct answer from the options given below:
A. Under fixed exchange rates and perfect capital mobility, a country cannot pursue an independent monetary policy.
B. Under flexible exchange rates and perfect capital mobility, a country can not pursue independent fiscal policies.
C. Under fixed exchange rates and perfect capital mobility, fiscal expansion is extremely effective.
D. Under flexible exchange rate and perfect capital mobility, a country can pursue an independent monetary policy.
E. Both under fixed and flexible exchange rates, there are no constraints on pursuing fiscal or monetary policies independently.
Choose the correct answer from the options given below:
Updated On: Mar 12, 2024
- A and C only
- A, C and D only
- B and D only
- B and E only
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The Correct Option is B
Solution and Explanation
The correct option is(B): A, C and D only
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