Luis, a Colombian investor, buys a home in Cancun. The cost of the home is $1M. Mexico has a flexible exchange rate, and Colombia has a flexible exchange rate.
(a) The money supply stays the same in Colombia and stays the same in Mexico
(b) The money supply goes down in Colombia and goes up in Mexico
(c) None of the above

The Central Bank of Colombia wants the peso to appreciate. The mechanism is foreign exchange reserves (dollars). Should they sell dollars and buy pesos? Or should they buy dollars and print pesos?

Choose the correct statement:
(i) Countries with free capital mobility and flexible exchange rates cannot www use monetary policy to stabilize their economies.
(ii) Countries with free capital mobility that use monetary policy to stabilize wwwwwwww their economies cannot have a flexible Exchange rate.
(iii) Both answers are not true.