a) Show how fiscal policy works with capital mobility and fixed exchange rates b) How and why does monetary policy retain its effectiveness when there is perfect mobility of capital? c) It is sometimes said that a Central Bank is a necessary condition for a balance of payments deficit. What is the explanation for this argument?

a) Show how fiscal policy works with capital mobility and fixed exchange rates b) How and why does monetary policy retain its effectiveness when there is perfect mobility of capital? c) It is sometimes said that a Central Bank is a necessary condition for a balance of payments deficit. What is the explanation for this argument?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 3QCMC

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