Question
Consider an increase in government spending (G) in a country. In the open economy 3-pane model, which of the following answers is INCORRECT ? Group
Consider an increase in government spending (G) in a country. In the open economy 3-pane model, which of the following answers is INCORRECT?
Group of answer choices
A. The IS curve shifts to the right in pane 1.
B. The nominal exchange rate depreciates in equilibrium.
C. The trade deficit increases in equilibrium.
D. The capital outflow decreases as a result.
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Essentials of Economics
Authors: Bradley Schiller, Karen Gebhardt
10th edition
125923570X, 978-1259235702
