Overshooting elucidate why permanent government spending

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TRUE/ FALSE questions on Exchange Rates

For the following questions, answer True (T), False (F) or Uncertain (U). Please briefly explain your answer.

1. Exchange rate overshooting explains why permanent government spending increases are less effective in increasing output than temporary increases.

2. Bretton Woods failed because the U.S. abused its position as the reserve currency country.

3. A central bank's inflation target affects the country's exchange rate.

4. A gold (exchange) standard introduces short-term and long-term price stability.

5. The creation of the EMU has led to greater restrictions on both monetary and fiscal policy on the part of its member countries.

6. An increase in the European Union money supply has no impact on the Canadian economy.

Reference no: EM1338467

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