Which of the following statements is true?
A)A domestic monetary shock is less disruptive with floating exchange-rates.
B)If foreign capital is highly responsive to changes in interest rates, then domestic spending shocks are less disruptive with fixed exchange-rates.
C)With floating exchange-rates the transmission of business cycles through foreign trade and repercussion is less than with fixed exchange-rates.
D)International capital-flow shocks have domestic effects under fixed exchange-rates but not under floating exchange-rates.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is true?
A)A domestic monetary shock is less disruptive with floating exchange-rates.
B)If foreign capital is highly responsive to changes in interest rates, then domestic spending shocks are less disruptive with fixed exchange-rates.
C)With floating exchange-rates the transmission of business cycles through foreign trade and repercussion is less than with fixed exchange-rates.
D)International capital-flow shocks have domestic effects under fixed exchange-rates but not under floating exchange-rates.

Which of the Following Statements Is True