Multiple Choice
If the Mundell-Fleming model is modified to allow the exchange rate to have a direct effect on the consumer price index, then an appreciation of the currency will lead to:
A) an increase in the overall cost of living.
B) a decrease in the overall cost of living.
C) no change in the overall cost of living.
D) an increase in the price of imported goods only.
Correct Answer:
Verified
Correct Answer:
Verified
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