The assignment rule says that, with fixed exchange rates, fiscal policy should be used to stabilize the balance of payments and monetary policy should be used to stabilize the domestic economy.

Question

Quizplus · Accepted Answer

The assignment rule actually suggests the opposite: with fixed exchange rates, monetary policy should be used to stabilize the balance of payments, while fiscal policy should be aimed at stabilizing the domestic economy.

The Assignment Rule Says That, with Fixed Exchange Rates, Fiscal