A minimal level of coordination is:
A. the exchange of information
B. the acceptance of mutually consistent policies
C. joint action
D. all of the above
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With floating exchange rates and perfect capital mobility, ( ) is effective for a small open economy.
A. fiscal policy alone
B. monetary policy alone
C. fiscal policy and monetary policy
D. exchange rate policy
Under fixed exchange rates and perfect capital mobility, ( ) is effective for a small open economy.
A. fiscal policy alone
B. monetary policy alone
C. fiscal policy and monetary policy
D. exchange rate policy
Assume a nation is of unemployment and external balance, given a fixed exchange rates, a can achieve both internal and external balance by:
A. an expansionary fiscal policy with a tight monetary policy
B. an expansionary fiscal policy alone
C. a tight monetary policy alone
D. an easy monetary policy alone
Assume a nation is of unemployment and external balance, given a fixed exchange rate, an expansionary fiscal policy alone will cause:
A. achieving its internal objective only
B. arriving at the external balance only
C. reaching internal balance and external balance
D. nothing