Decide if the following statements are true, false or if the veracity is uncertain. Explain your answers. a. An economy subject to shocks should adopt a floating exchange rate regime to stabilize the output level b. With exchange rate depreciation, the domestic interest rates can be maintained lower than the international, given that with foreign currency a foreign investor can purchase more domestic currency. c. In a fixed exchange rate regime, a country can follow an independent monetary policy by using sterilized interventions on the foreign exchange market.
Decide if the following statements are true, false or if the veracity is uncertain. Explain your answers. a. An economy subject to shocks should adopt a floating exchange rate regime to stabilize the output level b. With exchange rate depreciation, the domestic interest rates can be maintained lower than the international, given that with foreign currency a foreign investor can purchase more domestic currency. c. In a fixed exchange rate regime, a country can follow an independent monetary policy by using sterilized interventions on the foreign exchange market.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Decide if the following statements are true, false or if the veracity is uncertain. Explain your answers.
a. An economy subject to shocks should adopt a floating exchange rate regime to stabilize the output level
b. With exchange rate
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