An economy is described by the following equations. Assume an open economy under the assumptions of the Mundell-Fleming model with perfect capital mobility. C = 20, 000 + 0.5(Y - T) I = 100, 000 - 1000r G = 25, 000 T = 25, 000 Md P = 2Y - 20000r M : P = 100, 000 CA = NX = 100, 000 - 5000s * = 15 (a) Equilibrium output in this economy is and the equilibrium exchange rate is (b) At this equilibrium, the country is None of these OExporting the same amount as it is importing 20.7 OImporting more than it is exporting 25.3 23.5 OExporting more than it is importing 24.3(e) Looking at the above policies, the increase in government spending will cause a decrease in NX when OThere are flexible but not fixed exchange rates Oin neither case There are fixed but not flexible exchange rates OIn both cases(c) Government spending increases by 10,000 to G = 35,000. Assuming there are floating exchange rates, which of the following will be the new equilibrium exchange rate? O25.7 O25.5 O27.7 ONone of these 027.5 (d) If the central bank was instead keeping the exchange rate fixed, what would it have to set the money supply equal to in response to the increase described in the last question? O140,000 O150,000 199.000 ONone of these 0300.000An economy is described by the following equations. Assume an open economy under the assumptions of the Mundell-Fleming model with perfect capital mobility. C = 20, 000 + 0.5(Y - T) I = 100, 000 - 1000r G = 25, 000 T = 25, 000 Md P = 2Y - 20000r M : P = 100, 000 CA = NX = 100, 000 - 50006 r= 15 (a) Equilibrium output in this economy is and the equilibrium exchange rate is $ (b) At this equilibrium, the country is None of these OExporting the same amount as it is imp 300,000 OImporting more than it is exporting 870,000 170,000 OExporting more than it is importing 200,000