Which of the goals pursued by policymakers in an open economy is desirable because it can reduce the severity of business cycles?
A) exchange-rate stability
B) monetary policy independence
C) free capital flows
D) appreciation of the domestic currency

Question

Quizplus · Accepted Answer

Monetary policy independence allows a country to adjust its interest rates and other monetary tools to stabilize the economy, thus reducing the severity of business cycles.

Which of the Goals Pursued by Policymakers in an Open