In the view of economists, which one of the following statements is true?

Question

Quizplus · Accepted Answer

Under flexible exchange rates, the country's monetary policy can have a greater impact on national income as changes in interest rates can result in changes in exchange rates, which in turn can affect the country's international competitiveness and thus its exports and imports. On the other hand, under fixed exchange rates, the country must maintain a constant exchange rate and therefore cannot rely as much on monetary policy to influence the economy. Fiscal policy can impact the economy regardless of the exchange rate regime. Therefore, option C is the correct answer.

In the View of Economists, Which One of the Following