作业帮宏观经济学：Explain why monetary policy is ineffective under fixed
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宏观经济学：Explain why monetary policy is ineffective under fixed exchange rates?
The interest rate is the monetary policy.
If the government want to control inflation, the interest rate is raised, the market would correctly predict the results becasue the exchange rates are fixed. So people will deposit more local currency, and more foreign currency would flow to this country. The output would decrease. As a result, the domatic prices would raise. So the monetary policy is ineffective.
If the government want to control inflation, the interest rate is raised, the market would correctly predict the results becasue the exchange rates are fixed. So people will deposit more local currency, and more foreign currency would flow to this country. The output would decrease. As a result, the domatic prices would raise. So the monetary policy is ineffective.
宏观经济学：Explain why monetary policy is ineffective under fixed
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