If a country's central bank seeks to stabilize the price level and if real shocks from abroad are important, then
A) the central bank should devalue under flexible exchange rates.
B) the central bank will not be able to realize its goal.
C) a flexible exchange rate is preferable to a fixed exchange rate.
D) a fixed exchange rate is preferable to a flexible exchange rate.
E) flexible and fixed exchange rates are equivalent.
Correct Answer:
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