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#58781 Bangla Language & Literature General Level 0

Which of the following statements is correct for an open economy that has a fixed exchange rate?

  1. A A current account deficit is always matched by net inflows of private capital
  2. B Interest rates are determined solely by the domestic demand for and supply of credit
  3. C Its inflation rate is unaffected by inflation rates in the rest of the world
  4. D The domestic money supply is affected by the balance of payments
Answer: D - The domestic money supply is affected by the balance of payments

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