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Using the Mundell-Fleming diagram, explain what is meant by effective policy instrument choice, being careful to identify clearly the critical elements of the diagram. Why is the EB curve postulated to be more interest-elastic than the IB curve? In what ways is the IS/LM/BP model preferable to the simple Mundell-Fleming diagram?

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M91992629

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