In the Mundell Analysis in Which, in a Situation of Fixed

question 21

Multiple Choice

In the Mundell analysis in which, in a situation of fixed exchange rates, a country is using monetary and fiscal policy to attain "external balance" (i.e., balance-of-payments equilibrium) and "internal balance" (i.e., full employment without inflation) , the country __________. In this context, if the country has a balance-of-payments surplus at the same time that it has inflation, the country should engage in __________.

• A) should assign monetary policy to the attainment of internal balance and fiscal policy To the attainment of external balance; expansionary ("easy") monetary policy and contractionary ("tight") fiscal policy
• B) should assign monetary policy to the attainment of internal balance and fiscal policy to the attainment of external balance; contractionary ("tight") monetary policy And expansionary ("easy") fiscal policy
• C) should assign monetary policy to the attainment of external balance and fiscal policy To the attainment of internal balance; expansionary ("easy") monetary policy And contractionary ("tight") fiscal policy
• D) should assign monetary policy to the attainment of external balance and fiscal policy To the attainment of internal balance; contractionary ("tight") monetary policy And expansionary ("easy") fiscal policy

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Definitions:

Error Scores

The difference between observed values and the values predicted by a model, reflecting the amount of inaccuracy or deviation.

Method

A systematic approach or procedure for achieving a particular objective or conducting research.

Standard Deviations

A measure of the amount of variation or dispersion in a set of values, indicating how much the values differ from the mean of the data.

Interrater Reliability

A measure of consistency among multiple raters or observers in their assessments or measurements.