Question: Give correct answers and explain it Which statement below is likely to be FALSE? Select one: O A. Central banks have to be more aggressive

Give correct answers and explain it

Give correct answers and explain it Which statement below is likely to

Which statement below is likely to be FALSE? Select one: O A. Central banks have to be more aggressive when making interest rate changes in the open economy because the open-economy "IS curve' is steeper than in the closed economy. O B. The interest rate differential must be zero with constant real exchange rate, but the growth rate in the price level does not have to be constant for a small-open economy to be in a medium-run equilibrium O C. In a small open economy, real exchange rate depreciation will lead to a decline in the price-setting real wage if domestic wage-setting behavior does not take imported inflation into account O D. In the inflation-targeting monetary policy framework, potentially dangerous financial imbalances can emerge even in the face of successful inflation targeting since financial variables are only considered to the extent that they influence forecast CPI inflation

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