If a country adopts a fixed-exchange-rate regime, then it is _____ for monetary policymakers to stabilize employment or prices than if it had a floating-exchange-rate regime.easiermore difficultneither easier nor more difficultimpossible

Monetary policy can be autonomous if _____.[Hint: see page 20 of lecture 4B]Group of answer choicesinterest rates in foreign countries are lowerinterest rates in foreign countries are higherthe exchange rate floats and capital is mobilethe exchange rate is fixed and capital is mobile

Which of the following is considered the most difficult consideration for a country when adopting a flexible exchange rate regime?Group of answer choicesThe country need to be prudent in their independent monetary and fiscal policies.The country needs to have a sophisticated financial system.The country’s currency value can be very volatile and create uncertainty for its businesses.Speculators are unable to destabilize the currency.

A country that has a fixed-exchange-rate regime:is more likely to inflate the money supply than a country with a floating-exchange-rate regime.can never have a central bank that can conduct independent monetary policy.can still conduct independent monetary policy.no longer has the ability to implement capital controls.

A fixed exchange rate regime(a) forces a country to give up free international flows of capital.(b) forces a country to abandon independent monetary policy(c) can eliminate exchange rate uncertainty(d) is the model used by the U.S. Federal Reserve.

With fixed exchange rates and capital mobility, _____.[Hint: see page 18 of lecture 4B]Group of answer choicesinterest rates are higher in the home country than in foreign countriesinterest rates in the home country and in foreign countries are equalizedthe central bank in the home country has monetary autonomyinterest rates are lower in the home country than in foreign countries