Using the IS-LM-BP Model with the Perfect Capital Mobility Assumption

question 12

Multiple Choice

Using the IS-LM-BP model with the perfect capital mobility assumption to answer this question.Which of the following statements is TRUE?
I.In a floating exchange rate regime,fiscal policy is effective in stimulating income.
II.In a floating exchange rate regime,monetary policy is effective in stimulating income.

• A) Only I is true.
• B) Only II is true.
• C) Both I and II are true
• D) Neither I nor II is true.

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Definitions:

Express Trust

A fiduciary relationship deliberately created by the trustor through direct declaration, specifying how trust assets are to be held and managed by a trustee.

Per Capita

A method of distributing an intestate’s estate so that each heir in a certain class (such as grandchildren) receives an equal share.

Probate Judge

A Probate Judge oversees legal processes involving the distribution of a deceased person's estate, including the validation of wills and resolving contests and claims against the estate.

Intestacy Statutes

Laws that determine how a person's property will be distributed if they die without a will.