Multiple Choice
If price expectations are assumed to be correct, money demand is proportional to income, and there are no international capital flows, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases?
A) classical closed economy
B) classical open economy
C) IS-LM model
D) Mundell-Fleming model with floating exchange rate
Correct Answer:
Verified
Correct Answer:
Verified
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