Analyze the following issues relating to exchange rate adjustments in the short run and the Mundell-Fleming model.

1. A country that fixes its exchange rate loses monetary policy independence. Explain.
2. In late 2017, the Trump administration cut taxes and increased fiscal spending. Meanwhile, the Fed continued tightening monetary policy. What would the Mundell-Fleming model predict in terms US output, interest rate, and USD exchange rate? Can you think of any notable historical precedent of a similar policy combination?
3. What would be the "spillover" impact of US macroeconomic policy in part B. on another open economy with a flexible exchange rate?
4. For most Asian countries, China has replaced the US as the largest export market. What would be the impact of monetary policy easing in China for these Asian countries? Would it matter if the exchange rate is fixed or flexible?