Which of the following is a characteristic of the 'Global Financial Cycle' hypothesis?
A.Co-movements in capital flows, asset prices and credit growth across countries are driven in large part by global factors, especially US monetary policy
B.Only domestic monetary policy matters
C.National financial conditions are completely independent of global factors
D.Capital flows are always driven by local pull factors
Explanation:
The global-financial-cycle hypothesis emphasises that fluctuations in global risk appetite, often linked to US monetary policy and the strength of the dollar, generate correlated movements in capital flows, credit and asset prices across many countries.
Explanation:
Headline inflation measures the total inflation in an economy, including all items such as food, fuel and others. Core inflation excludes volatile items like food and fuel.
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