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The exchange rate channel of monetary policy

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Reference no: EM13929184

Understand belowed statements' explanations

"a) "If countries fix their exchange rate, the exchange rate channel of monetary policy does notexist." Is this statement true, false or uncertain? Explain.

b) "The cost of financing investment are related only to interest rates, therefore, the only way thatmonetary policy can affect investment spending is through its effects on interest rates." Is thisstatement true, false or uncertain? Explain.

c) "A decrease in short-term interest rates necessarily implies a stance of monetary easing." Is thisstatement true, false or uncertain? Explain."

Reference no: EM13929184

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