The naninal excharye guantty of ferean wrrencies per unit of nationdl cuntency rateis defined in this excersise as the ภ์ correntes national Cuttenc I. Without any nustification : )Wote the to evatons deseribing the Mundell-Flenig modle Catfully represent the twe egathoas on the same ra 2. Use the Nundell-Pleming dingran to duseribe what Nov excharge rate undlor loah Cates in respenge to each of the tolaing oolicies would appen re coma and ha fixed excha (a) a decrease in meney apply b) a deereuse in government, ourehases Ca) a deerease in faxes The naninal excharye guantty of ferean wrrencies per unit of nationdl cuntency rateis defined in this excersise as the ภ์ correntes national Cuttenc I. Without any nustification : )Wote the to evatons deseribing the Mundell-Flenig modle Catfully represent the twe egathoas on the same ra 2. Use the Nundell-Pleming dingran to duseribe what Nov excharge rate undlor loah Cates in respenge to each of the tolaing oolicies would appen re coma and ha fixed excha (a) a decrease in meney apply b) a deereuse in government, ourehases Ca) a deerease in faxes
Answer 1 a) The two equations describing the Mundell-Fleming model are:- The IS curve: Y = C + I + G + N X here NX is net exports. Lower money demand is caused by higher interest rates and a lower income level. KA is the capital account surplus, CA is the current account surplus and BOP is the balance of payments surplus.
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