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True or False Questions ( Please answer either true or false for the given questions ) Under perfect capital mobility, interest rates (id, if) can
True or False Questions (Please answer either true or false for the given questions)
- Under perfect capital mobility, interest rates (id, if) can permanently vary, if monetary policy is tightened.
- The degree of capital mobility could be impacted by differences in income tax regimes.
- A fixed exchange rate is best for small economies like Fiji, at least during the COVID19 crisis
- A devaluation can cause inflation and lead to a raise in external debt.
- A BOP surplus will increase foreign reserves is the domestic economy operates under flexible exchange rate system.
- If nominal GDP was 1500 and real was 1450, the implicit GDP deflator would imply a moderate rate of inflation of about 3%.
- If the goods market equilibrium was Y = 2500-50i, and government expenditure was increased by 50, a possible new IS curve would be Y = 2750-50i, provided Gwas 2.5
- The aggregate expenditure multiplier in ADAS is larger than that of the ISLM model.
- The rate of interest (i) is determined in the bonds market
- A possible expression that can model government spending is G = Gt-1where (t) is current year.
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