Under flexible exchange rates,
A)capital flows allow countries to execute policies on their own with no domestic ramifications.
B)incentives are present that promote monetary policy coordination between countries because without coordination there can be changes in exchange rates and capital flows that feed back to the domestic economy.
C)there is presently no monetary policy coordination between developed countries.
D)monetary policy coordination is presently led by the World Bank.

Question

Quizplus · Accepted Answer

Under flexible exchange rates, incentives exist for monetary policy coordination between countries because changes in exchange rates and capital flows can have domestic ramifications. Therefore, countries may seek to coordinate their policies to avoid these negative effects.

Under Flexible Exchange Rates