The Mundell-Fleming Model

Short-run exogenous variables

Capital mobility in a small open economy

Equilibrating forces in the goods and money markets (correct)

Demand components in the goods market

G T = T P·e P∗

C + c·(Y − T ) (correct)

NX − d·ε

I − b·r

0 < c < 1

b > 0

d > 0 and ε = G

r = r∗ (correct)

<p>P and P ∗ exogenous</p> Signup and view all the answers

<p>Equilibrating forces in the goods and money markets</p> Signup and view all the answers