Under purely flexible exchange rates, A) there is no ...

[HCHenry]

Under purely flexible exchange rates,
 
  A) there is no intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
  B) there is only occasional intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
  C) the domestic fiscal and monetary authorities retain considerable flexibility to prevent short-run variability in the nominal exchange rate.
  D) the domestic fiscal and monetary authorities retain considerable flexibility to prevent long-run variability in the nominal exchange rate.

Question 2

Negative correlation between x and y implies that
 
  A) when x is high, y is high.
  B) when x is high, y is low.
  C) xy < 0.
  D) x/y < 0.

[meltdown117]

Answer to Question 1

A

Answer to Question 2

B