When a country pegs its exchangerate, an increase in government spending (G) increases:

A.output.

B.the foreign rate.

C.the interest rate.

D.all of the above.

In an economy with fixed exchange rates that is performing near fulloutput, ( ) could become an issue that monetary policy would otherwise be able to address in an economy with flexible exchange rates by

inflation

unemployment

increasing interest rates

decreasing interest rates

.