An inflation-prone country
A) gains from vesting its monetary policy decisions with a conservative central bank.
B) loses from vesting its monetary policy decisions with a conservative central bank.
C) gains from vesting its fiscal policy decisions with a conservative central bank.
D) loses from vesting its fiscal policy decisions with a conservative central bank.
E) remains constant when vesting its fiscal policy decisions with a conservative central bank.
Question 2
Under the EMS, Germany set the system's
A) monetary policy while the other European countries pegged their currencies to the DM.
B) fiscal policy while the other European countries pegged their currencies to the DM.
C) monetary policy while the other European countries kept their currencies fluctuating relative to the DM.
D) fiscal policy while the other European countries kept their currencies fluctuating relative to the DM.
E) monetary policy, while other European countries maintained their traditional policies.
The prone position
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