Respuesta :

An example of an exchange rate policy that does not give the central banks and governments the power to conduct countercyclical monetary policy is the free-floating exchange rate.

What do you mean by monetary policy?

Monetary Policy refers to the control of the money quantity that is available in the economy.

In a Free-floating exchange rate system, governments and central banks do not participate in the market for foreign exchange.

Thus, a free-floating exchange rate does not give the central bank to conduct a countercyclical monetary policy.

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