Author Question: The credibility theory of EMS had as an effect A) the inflation rates of member countries ... (Read 53 times)

jc611 · **on:** Jun 30, 2018

The credibility theory of EMS had as an effect

A) the inflation rates of member countries converging to the low German levels, a result that was not matched by similar countries who did not fix their exchange rates.
B) the inflation rates of member countries failing to converge to the low German levels.
C) the inflation rates of member countries converging to the low German levels, but other countries including U.S. and Britain also reduced inflation in this time period without fixing exchange rates.
D) the inflation rate in Germany rose to match the inflation rates of other member countries.
E) the inflation rate in the U.S. dropped to the low German levels.

Question 2

The AA schedule shows

A) Interest rate and output pairs at which the foreign exchange market and the domestic money market are in equilibrium.
B) Exchange rate and output pairs at which the foreign exchange market and the domestic money market are in equilibrium.
C) Interest rate and output pairs at which only the foreign exchange market is in equilibrium.
D) Exchange rate and output pairs at which only the foreign exchange market is in equilibrium.
E) Exchange rate and output pairs at which only the domestic money market are in equilibrium.