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Please answer the following Macroeconomics question which relates to the Mundell Flemming model In the Mundell-Fleming model, analyze the impact of a rise in the

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Please answer the following Macroeconomics question which relates to the Mundell Flemming model

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In the Mundell-Fleming model, analyze the impact of a rise in the foreign interest rate a. First, assume flexible exchange rates. Using the dual diagram in r - y space and r -s space, show how the rise in r* affects the domestic interest rate, the exchange rate, and output. If the country wanted to use monetary or fiscal policy to get y back to its original equilibrium how would it do this? b. Then assume fixed exchange rates. Again, using the dual diagram in r - y space and r - s space, show how the rise in * affects the domestic interest rate and output. If the country wanted to use fiscal policy to get y back to its original equilibrium how would it do this

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