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According to the Mundell-Fleming Model, in an Economy with Flexible

Question 56

Multiple Choice

According to the Mundell-Fleming model, in an economy with flexible exchange rates, expansionary fiscal policy causes the exchange rate to ______ and expansionary monetary policy causes the exchange rate to ______.


A) rise; rise
B) rise; fall
C) fall; fall
D) fall; rise

Correct Answer:

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