For a small open economy with a fixed exchange rate: а. monetary policy is effective and fiscal policy is ineffective. b. monetary policy is ineffective and fiscal policy is effective. C. both monetary and fiscal policy are effective. d. · both monetary and fiscal policy are ineffective.

For a small open economy with a fixed exchange rate: а. monetary policy is effective and fiscal policy is ineffective. b. monetary policy is ineffective and fiscal policy is effective. C. both monetary and fiscal policy are effective. d. · both monetary and fiscal policy are ineffective.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 46P: Imagine that the economy of Germany finds itself in the following situation: the government budget...

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Question

For a small open economy with a fixed exchange rate:
а.
monetary policy is effective and fiscal policy is ineffective.
b. monetary policy is ineffective and fiscal policy is effective.
C. both monetary and fiscal policy are effective.
Od.
both monetary and fiscal policy are ineffective.

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