EXPLAIN IN DETAIL and GRAPHIC with the Mundell-Fleming model under flexible exchange rate and perfect capital mobility the different chain effects (i.e. changes in macroeconomic variables as PIB, interest rate, exchange rate, Investment, Consumption, currency movement, etc.) that would be generated if the Business Confidence Index falls permanently in a given country. How would the results obtained change if long periods of time (permanent changes) are analyzed through the Aggregate Supply (AS) and Aggregate Demand (AD) Model?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...
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Course: Macroeconomics

Subject: Mundell-Fleming Model

EXPLAIN IN DETAIL and GRAPHIC with the Mundell-Fleming model under flexible exchange rate and perfect capital mobility the different chain effects (i.e. changes in macroeconomic variables as PIB, interest rate, exchange rate, Investment, Consumption, currency movement, etc.) that would be generated if the Business Confidence Index falls permanently in a given country. How would the results obtained change if long periods of time (permanent changes) are analyzed through the Aggregate Supply (AS) and Aggregate Demand (AD) Model

 

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