When domestic and foreign bonds are perfect substitutes, a central bank should be indifferent about using domestic

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When domestic and foreign bonds are perfect substitutes, a central bank should be indifferent about using domestic or foreign assets to implement monetary policy. Discuss.

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International Economics Theory and Policy

ISBN: 978-0273754206

9th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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Question Posted: Oct 24, 2012 11:47 PM

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When domestic and foreign bonds are perfect substitutes, a central bank should be indifferent about using domestic

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A central bank that is maintaining a fixed exchange rate will require an adequate buf...View the full answer

International Economics Theory and Policy

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