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IV. Under imperfect capital mobility, sticky prices and a fixed exchange rate 1. What is the short- and long-run effect of expansionary money supply on
IV. Under imperfect capital mobility, sticky prices and a fixed exchange rate 1. What is the short- and long-run effect of expansionary money supply on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 2. What is the short- and long-run effect of contractionary money supply on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 3. What is the short- and long-run effect of fiscal expansion on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 4. What is the short- and long-run effect of fiscal contraction on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. a 5. Under a fixed rate regime, which policy seems more effective between fiscal and monetary policies? Explain. IV. Under imperfect capital mobility, sticky prices and a fixed exchange rate 1. What is the short- and long-run effect of expansionary money supply on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 2. What is the short- and long-run effect of contractionary money supply on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 3. What is the short- and long-run effect of fiscal expansion on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. 4. What is the short- and long-run effect of fiscal contraction on the economy? Explain what happens to (1) interest rate, (2) price level, (3) nominal and real exchange rate, (4) money stock, (5) current account and (6) output level. a 5. Under a fixed rate regime, which policy seems more effective between fiscal and monetary policies? Explain
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