Question
In the Mundell-Fleming model with a floating exchange
rate and perfect capital mobility, what is the effect of an increase in the money supply?Solution
Under a floating exchange rate with perfect capital mobility, an increase in the money supply shifts the LM curve to the right, reducing the interest rate. This leads to capital outflows, causing the domestic currency to depreciate. The depreciation makes domestic goods cheaper for foreigners, increasing net exports and thus increasing output.
At the vary centre of the Galaxy lies a remarkable object—a massive black hole surrounded by an accretion disk of high-temperature gas.
As vessel loading is (1)/not possible in Ukraine, (2)/buyers are trying to secure (3)/supplies at Russia (4).
In every household, through the open windows, you could see children sitting on the bed, rocking back and forth and memorising lessons in the book kept...
Directions: Identify the grammatical errors in the context of the given sentence. If there is no error, choose option 5, i.e., No error. (Ignor...
Inflation figures based on (A) /the Consumer Price Index (CPI) shows (B)/Â retail price gains at (C) / an resurgent trajectory with (D) /Â food prices...
I have some work (1)/Â to do and (2)/Â so I will not be (3)/ able to accompany you (4)/ No error (5)
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- Parts of the following sentence have been given as options. Select the option that contains an error.
She bought a bunch of flower from the market.... In terms of technology and performance, Indian missile systems are compared with any other system in the worlds.
...X. France and Spain settled its hostilities on the island, by way of the Treaty of Ryswick of 1697, and divided Hispaniola between them.
1. These...
