lexible exchange rates, the central bank of

Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank of

A.an overheated economy could cool down activity by increasing the money supply without worrying that undesired reserve inflow would undermine its stabilization

B.a cooled economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization

C.an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization

D.an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve outflow would undermine its stabilization

E.None of the

Answer: C