Under flexible exchange rates, monetary policy is a__________________ .
A) powerful long-term tool
B) powerful short-term tool
C) ineffective short-term tool
D) ineffective long-term tool

Question

Quizplus · Accepted Answer

Under flexible exchange rates, monetary policy is considered a powerful short-term tool because it can quickly influence interest rates, which in turn affect exchange rates and thus impact the economy in the short term.

Under Flexible Exchange Rates, Monetary Policy Is A__________________