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According to the Mundell-Fleming model, what does the IS-LM model focus on?
According to the Mundell-Fleming model, what does the IS-LM model focus on?
- 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
In the Mundell-Fleming model, what is assumed about the demand components in the goods market?
In the Mundell-Fleming model, what is assumed about the demand components in the goods market?
- G T = T P·e P∗
- C + c·(Y − T ) (correct)
- NX − d·ε
- I − b·r
What is assumed about the capital mobility in a small open economy in the Mundell-Fleming model?
What is assumed about the capital mobility in a small open economy in the Mundell-Fleming model?
- 0 < c < 1
- b > 0
- d > 0 and ε = G
- r = r∗ (correct)
In the Mundell-Fleming model, what is assumed about the short-run exogenous variables?
In the Mundell-Fleming model, what is assumed about the short-run exogenous variables?
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What is the main focus of the Mundell-Fleming model?
What is the main focus of the Mundell-Fleming model?
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