Multiple Choice
Under perfect capital mobility and fixed exchange rates, expansionary _____ is especially effective because the _____.
A) fiscal policy; LM curve effectively is vertical.
B) monetary policy; LM curve effectively is the same as the FE curve.
C) fiscal policy; interest rate does not change.
D) monetary policy; interest rate does not change.
Correct Answer:
Verified
Correct Answer:
Verified
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