In an open economy with fixed exchange rates, fiscal policy is most effective at increasing real income if
A: capital mobility is perfect.
B: capital mobility is high.
C: capital mobility is low.
D: fiscal policy is ineffective with fixed exchange rates.
A: capital mobility is perfect.
B: capital mobility is high.
C: capital mobility is low.
D: fiscal policy is ineffective with fixed exchange rates.
举一反三
- Which of the following statements is accurate?____. A: Fiscal policy is not effective with fixed exchange rates in an environment of highly responsive international capital flows. B: Fiscal policy is highly effective with fixed exchange rates and unresponsive international capital flows. C: Fixed exchange rates greatly constrain a country's ability to pursue an independent monetary policy. D: Contractionary monetary policy is effective under a fixed exchange rate regime.
- Which of the following statements is accurate? ____. A: Fiscal policy is not effective with fixed exchange rates in an<br/>environment of highly responsive international capital flows. B: Fiscal policy is highly effective with fixed exchange rates and<br/>unresponsive international capital flows. C: Fixed exchange rates greatly constrain a country's ability to pursue<br/>an independent monetary policy. D: Contractionary monetary policy is effective under a fixed<br/>exchange-rate regime.
- In a country with floating exchange rates and low capital mobility, an increase in government spending will be A: highly effective. B: less effective than with high capital mobility. C: not effective at all. D: harmful to the growth of real incomes.
- According to the assignment rule, which of the following policy mixes<br/>is appropriate for a country with high inflation, a balance of<br/>payments deficit, and fixed exchange rates? ____. A: Expansionary fiscal policy and expansionary monetary policy B: Expansionary fiscal policy and contractionary monetary policy C: Contractionary fiscal policy and expansionary monetary policy D: Contractionary fiscal policy and contractionary monetary policy
- Which one of the following statements is the MOST accurate? () A: Fiscal policy<br/>affects employment less under fixed than under flexible exchange rate<br/>regimes. B: Fiscal policy has<br/>the same effect on employment under fixed and flexible exchange rate<br/>regimes. C: Fiscal policy<br/>cannot affect employment under fixed exchange rate but does affect<br/>output under flexible exchange rate regimes. D: Fiscal policy<br/>affects employment more under fixed than under flexible exchange rate<br/>regimes.