[Solved] Advocates of Flexible Exchange Rates Claim That Under Flexible Exchange

Question 103
Multiple Choice

Advocates of flexible exchange rates claim that under flexible exchange rates, if the central bank faced unemployment

A) and thus wished to decrease its money supply, there would no longer be any legal barrier to the currency depreciation this would cause.
B) and thus wished to expand its money supply, there would no longer be any legal barrier to the currency depreciation this would cause.
C) and wished to expand its money supply, there would no longer be any legal barrier to the currency appreciation this would cause.
D) and wished to decrease its money supply, there now would be a legal barrier to the currency depreciation this would cause.
E) and wished to increase output, there would no longer be a legal barrier to the currency appreciation this would cause.

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