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Use the Mundell-Fleming model to answer the following questions about the state of Arkansas (a small open economy. a. What kind of exchange rate system
Use the Mundell-Fleming model to answer the following questions about the state of Arkansas (a small open economy.
a. What kind of exchange rate system does Arkansas have with its major trading partners (Alabama, Tennessee, Louisiana, etc)?
b. If Arkansas has a recession, should the state government use monetary or fiscal policy to stimulate employment? (Note: For this question, assume that the state government can print money)
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