Answer to Question #92625 in Macroeconomics for Nes

Question #92625

In the Mundell-Fleming model with a floating exchange rate, what happens to aggregate income, the exchange rate, and the trade balance when the world interest rate rises?

Expert's answer

A rise in the global interest rate does not affect aggregate income. On the other hand, this change lowers the nominal exchange rate and improves the balance of payment due to growth in exports.

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Assignment Expert

15.08.19, 16:20

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Nes

14.08.19, 22:41

Show and explain the AS adjustment process, in other words, how output adjusts over time, from the short run to the long run (following the increase in G).

Assignment Expert

14.08.19, 19:17

Dear visitor, please use panel for submitting new questions

Nes

14.08.19, 17:31

Show and explain the AS adjustment process, in other words, how output adjusts over time, from the short run to the long run (following the increase in G).

Answer to Question #92625 in Macroeconomics for Nes

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