Assume perfect capital mobility. Under a fixed exchange rate system, expansionary fiscal policy causes income to _____, while under flexible exchange rates expansionary fiscal policy causes income to _____
a. increase; increase
b. increase; remain unchanged
c. increase; decrease
d. remain unchanged; increase
B
Economics
You might also like to view...
For each of the following sets of supply and demand curves, calculate equilibrium price and quantity
a. QD = 1000 - P; QS = P b. QD = 1500 - 2P; QS = 100 + 2P c. QD = 2000 - 3P; QS = -300 + 3P
Economics
What will happen when there is a rightward shift in the demand curve?
A) The product price will instantaneously adjust downward. B) Product prices do not change in this situation. C) Producers will decrease the product price. D) A new, higher price is not instantaneously achieved, but the price will rise over time.
Economics