Which of the following regimes allows for effective domestic monetary policy?

Question

Quizplus · Accepted Answer

Under a free float exchange rate regime, a country's central bank can use monetary policy effectively to adjust the economy. This is because the exchange rate is determined by market forces, allowing the central bank to focus on domestic objectives such as controlling inflation or stimulating economic growth without worrying about maintaining a fixed exchange rate.

Which of the Following Regimes Allows for Effective Domestic Monetary