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Under Fixed Exchange Rates

Question 10

Multiple Choice

Under fixed exchange rates,


A) fiscal policy is ineffective in influencing national income with all degrees of International capital mobility.
B) fiscal policy is most effective in influencing national income when capital is perfectly Mobile internationally.
C) monetary policy is very effective in influencing national income if capital is perfectly Immobile internationally.
D) monetary policy is more effective when capital is perfectly mobile internationally than when capital is perfectly immobile internationally.

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