The trade-off between coordinating or not coordinating policies for central banks is measured in terms of
A) inflation and the lowered effectiveness of policies.
B) wage inflation and increased effectiveness of policies.
C) speculative pressure and intra-marginal adjustments.
D) fixed and floating exchange rates.
Question 2
Coordinating policies when two countries have ________ exchange rates can increase the effect of ________.
A) fixed; inflationary policy bias
B) floating; inflationary policy bias
C) fixed; the locomotive effect
D) floating; beggar-thy-neighbor effect
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