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Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank ofA)

Chako

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8 years ago

Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank ofA)

Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank of
A) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
B) a cooled economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
C) an overheated economy could cool down activity by decreasing employment and increasing output without worrying that this would undermine its stabilization effort.
D) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve outflow would undermine its stabilization effort.
E) an overheated economy could cool down activity by increasing the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.

Textbook

International Economics: Theory and Policy

Edition: 10^th

Author: Krugman

Read 174 times

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machukian

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Chako Author

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8 years ago

Good answer, thank you

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machukian

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7 years ago

Good luck

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