Given an Open Economy with High Capital Mobility and Fixed

question 26

True/False

Given an open economy with high capital mobility and fixed exchange rates, suppose an expansionary fiscal policy is implemented to combat recession.The initial and secondary effects of the policy cause aggregate demand to increase, thus strengthening the policy's expansionary effect.

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Definitions:

Respondeat Superior

A doctrine in agency law under which a principal (employer) may be held liable for the wrongful acts committed by agents or employees acting within the scope of their agency or employment.

Agency Law

The legal principles governing the relationship between an agent who acts on behalf of another person or entity, known as the principal, and the extent of their legal authority.

Principal-Employer

The primary entity or individual who employs and is responsible for the actions of their workers or agents.

Wrongful Acts

Actions or conduct that are unlawful or infringe upon someone's rights.