Question

4. Derive the IS and LM curves for small open economy with perfect capital mobility.
Will fiscal policy be effective in such an economy with the assumption of flexible
18.75
exchange rate? Explain with economic reasoning.​

Answer 1

Answer:

h

Explanation:

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Answer 2

Answer:

Explanation:

The IS-LM-BP Approach An economy open to international trade and payments will face different problems than an economy closed to the rest of the world. The typical introductory economics presentation of macroeconomic equilibrium and policy is a closed-economy view. Discussions of economic adjustments