Assume that a country has a fixed exchange rate

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Assume that a country has a fixed exchange rate, but that the rate is above the rate that would occur if the central bank did not intervene to maintain it. That is that the desired "e" is greater than the "e" that would occur without central bank intervention. Also assume that the country's unemployment rate is higher than where the central bank would like it. Is the monetary policy required to maintain the exchange rate consistent with the monetary policy that would bring down unemployment, or are they in opposition?

a) Consistent.

b) In opposition.

c) Neither.

d) Both.

Reference no: EM13774388

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