Which of the following statements is incorrect according to the sectoral model? A) Export-oriented producers prefer a fixed exchange rate. B) Import-competing producers prefer a floating exchange rate. C) Nontraded producers prefer a floating exchange rate. D) Financial services prefer a fixed exchange rate. E) Financial services prefer monetary-policy autonomy.

Question

Quizplus · Accepted Answer

The sectoral model predicts that financial services prefer a floating exchange rate because it allows for greater monetary-policy autonomy. A fixed exchange rate would limit the ability of monetary authorities to adjust interest rates and manipulate the money supply.

Which of the Following Statements Is incorrect according to the Sectoral