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Under perfect capital mobility and fixed exchange rate, analyze the effects of decrease in government spending on income, interest rate, balance of payment account and exchange rate

Suppose "Perfect capital mobility" and fired exchange rates analyze the effects of a increase in government spending. Include in your response the effects of the fiscal policy action on income, the Intrest rate, the current and capital account balances, the balance of payments account balancesof the exchange rate. Use the IS-LK-BP digrams to illustrate your response.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M920521

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