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3 (65 marks) (Open Economy IS-LM and Dornbusch Model): Consider the following open-economy IS-LM model, where capital is perfectly mobile across countries. Assumptions:iii) Do we
3 (65 marks) (Open Economy IS-LM and Dornbusch Model): Consider the following open-economy IS-LM model, where capital is perfectly mobile across countries. Assumptions:iii) Do we have "under" or "over" shooting of exchange rate dynamics? (consider sticky prices) iv) What would be the effect of the policy on the net exports
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
