Since 1973 dirty floats have been required because
A) PPP has not held.
B) high inflation countries have stronger currencies than countries with low inflation.
C) countries are not cooperating as much as original theorists predicted.
D) in the short run, monetary and fiscal policy only affects the autonomous home economy.
E) countries with a floating exchange rate have laissez-faire economies.
Question 2
After Norway unilaterally pegs the krone to the euro, domestic money market disturbances will
A) no longer affect domestic output despite the continuation of float-rate regime against non-euro currencies.
B) now have major effect on domestic output despite the continuation of float-rate regime against non-euro currencies.
C) have some effect on domestic output despite the continuation of float-rate regime against non-euro currencies.
D) have major effect on domestic employment despite the continuation of float-rate regime against non-euro currencies.
E) no longer affect foreign imports despite the continuation of float-rate regime against non-euro currencies.
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