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Chako Chako
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Posts: 2948
8 years ago
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

International Economics: Theory and Policy


Edition: 10th
Author:
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machukianmachukian
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Posts: 2946
8 years ago
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Chako Author
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8 years ago
Good answer, thank you
wrote...
8 years ago
Good luck
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