In the monetary small open-economy model,a fixed exchange rate insulates the domestic price level from
A) both real and nominal shocks from abroad.
B) real shocks from abroad, but not nominal shocks from abroad.
C) nominal shocks from abroad, but not from real shocks from abroad.
D) neither real nor nominal shocks from abroad.
E) increases in foreign price levels, but not from increases in foreign interest rates.
Correct Answer:
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