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Under flexible exchange rates a small open economy should…

Under flexible exchange rates a small open economy should…

A. Lose control of its monetary policy

B. Be insulated from its trading partners’ inflation

C. Tend to experience the inflation of its trading partners

D. Find that changes in its interest rates match changes in its trading partner’s interest rates

Reference: https://www.econstor.eu/bitstream/10419/100814/1/wp1995-07.pdf


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