Question

Under a fixed exchange rate system (

  • A _________ would be an exogenous monetary policy instrument, whereas under a flexible exchange rate system (
  • B ______________ would be an endogenous monetary policy instrument.      
A A) the exchange rate; (B) the exchange rate
B A) the exchange rate; (B) the interest rate
C A) the interest rate; (B) the exchange rate
D A) the interest rate; (B) the interest rate
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