Question
Which of the following is the most accurate a. Under fixed exchange rates to maintain the exchange rate the government needs to conduct sterilized monetary
Which of the following is the most accurate a. Under fixed exchange rates to maintain the exchange rate the government needs to conduct sterilized monetary policy to prevent inflationary pressures. b. Under fixed exchange rates the government responds to a positive supply shock by conducting sterilized monetary policy. c. Under fixed exchange rates the government needs to conduct monetary policy to maintain the exchange rate but needs not to sterilize it as this will be proved inefficient in maintaining the exchange rate. d. Under fixed exchange rates the government needs to conduct monetary policy to maintain the exchange rate but needs not to sterilize it as this will be proved inefficient in maintaining inflation. e. A and c f. None of the above
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