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A You Are the Chief Economic Adviser in a Small

question 18

Essay

a. You are the chief economic adviser in a small open economy with a floating-exchange-rate system. Your boss, the president of the country, wishes to increase the level of output in the short run in order to win reclection. Do you recommend using expansionary or contractionary monetary or fiscal policy?

b. Use the Mundell-Fleming model to illustrate graphically your proposed policy. Be sure to Label:
i, the azes;
ii. the curves,
iii. the initial equilibrium levels
iv. the direction the curves shift
v. the new short-run equilibrium


Definitions:

Sex Differences

The biologically and socially influenced distinctions between the male and female sexes, including physical, psychological, and behavioral differences.

Eating Disorders

Mental disorders characterized by abnormal eating habits that negatively affect a person's physical or mental health.

Thin

Slang for NO.

Accepted

Generally recognized or approved by a significant group or authority.

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