« previous next »

Author Question: Illustrate the effectiveness of monetary policy with fixed exchange rates. What will be an ideal ... (Read 50 times)

ETearle

  • Hero Member
  • *****
  • Posts: 580
on: Jun 30, 2018
Illustrate the effectiveness of monetary policy with fixed exchange rates.
 
  What will be an ideal response?

Question 2

Fiscal expansion under fixed exchange rates will have what temporary effect?
 
  A) the money supply will decrease.
  B) output will decrease.
  C) the exchange rate will increase.
  D) the exchange rate will decrease.
  E) there will be no effect.


mariahkathleeen

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jun 30, 2018
Answer to Question 1

The required intervention to maintain the fixed exchange rate will undo any effect on income of an increase or decrease in the money supply. Illustrate by shifting LM curve and then explaining how intervention will return LM to original position.

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Gas exchange across body surfaces. Gas exchange across body surfaces.
Cultures Ideal Body Types Cultures Ideal Body Types
High rates of rural poverty have been a part of the United States from its origin to the present. ... High rates of rural poverty have been a part of the United States from its origin to the present. ...
Change in air temperature at various air flow rates for a 7 pass operation Change in air temperature at various air flow rates for a 7 pass operation
The environmental policy changes over time The environmental policy changes over time
Saving Rates by Income Quintile, 2003 Saving Rates by Income Quintile, 2003
Video: Hormonal regulation of blood pressure - RAA system

For a complete list of videos, visit our video library