Refer to Figure 12.6. Under a fixed exchange rate system, if the centr

Refer to Figure 12.6. Under a fixed exchange rate system, if the central bank can increase the output gap with expansionary policy and still maintain the fixed exchange rate, this would best be represented by a movement from ________ in Panel (a) and

a movement from ________ in Panel (b). A) point A to point B; point X to point Y
B) point C to point A; point X to point Y
C) point D to point C; point Y to point X
D) point B to point D; point Y to point X

ANSWER

A