Question $8$

$2\mathrm{.}5$ pts

How would you best compare the effects of monetary policy in terms of money supply and output under floating and fixed exchange rate regimes? Select one $-$ the most appropriate answer given provisions of AA $-$ DD model.

No correct answer.

Efficiency of these two policies depends on how much the central bank intervenes.

All else equal monetary policy under fixed exchange rate regime unlike that under the floating exchange rate regime is not able to produce impact on output and money supply.

All else equal monetary policy under floating exchange rate regime unlike that under the fixed exchange rate regime is not able to produce impact on output and money supply.

Monetary policy is generally not very effective under both exchange rate regimes.