In the Mundell-Fleming Model on a Y - E Graph

question 111

Multiple Choice

In the Mundell-Fleming model on a Y - e graph, the curves labeled IS^* and LM^* are labeled that way as a reminder that:

• A) the price level is held constant at the world price level p*.
• B) the interest rate is held constant at the world interest rate r*.
• C) the exchange rate is held constant at the world exchange rate e*.
• D) output is held constant at the full employment level.

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