Answer to Question #62654 in Macroeconomics for Asca

Question

Imagine a Mundell-Fleming economy with fully immobile capital and mark the correct state- ments.(several answers correct)
(a) Fiscal policy is ineffective in boosting the economy in a fixed exchange rate regime. (b) Fiscal policy is effective in boosting the economy in a flexible exchange rate regime.
(c) Monetary policy is effective in boosting the economy in a flexible exchange rate regime. (d) Monetary policy is ineffective in boosting the economy in a fixed exchange rate regime.

Answer 1

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