Under Perfect Capital Mobility and Fixed Exchange Rates, Expansionary _____

question 39

Multiple Choice

Under perfect capital mobility and fixed exchange rates, expansionary _____ is especially effective because the _____.

• A)fiscal policy; LM curve effectively is vertical.
• B)monetary policy; LM curve effectively is the same as the FE curve.
• C)fiscal policy; interest rate does not change.
• D)monetary policy; interest rate does not change.

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Definitions:

Hydrophobic End

The part of a molecule that repels water, often found in molecules like lipids that have both hydrophilic (water-attracting) and hydrophobic (water-repelling) ends.

Hydrophilic End

The part of a molecule that is attracted to water, allowing it to dissolve or interact favorably with water molecules.

Condensation Reaction

A reaction in which two monomers are combined covalently through the removal of the equivalent of a water molecule; also called condensation synthesis. Compare with hydrolysis reaction.

Polymer

Large molecules composed of repeated subunits, which may be identical or different, known as monomers.