In the short run, all of the following are disadvantages of a fixed exchange rate regime except:O A. macroeconomic shocks must be addressed with fiscal policy.O B. open market operations are overused.OC. they can lead to future exchange rate crises.O D. interest rates are constant.According to Robert Mundell, for countries to constitute an optimal currency area, such as adopting a common currency, they must have:O A. a different composition of industries.O B. high factor mobility.O C. similar per capita GDP.O D. all of the above.

In the short run, fixed exchange create both advantage and disadvantage to the economy.

Answered: In the short run, all of the following…

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In the short run, all of the following are disadvantages of a fixed exchange rate regime except:

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In the short run, all of the following are disadvantages of a fixed exchange rate regime except:
O A. macroeconomic shocks must be addressed with fiscal policy.
O B. open market operations are overused.
OC. they can lead to future exchange rate crises.
O D. interest rates are constant.
According to Robert Mundell, for countries to constitute an optimal currency area, such as adopting a common currency, they must have:
O A. a different composition of industries.
O B. high factor mobility.
O C. similar per capita GDP.
O D. all of the above.

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