In the Mundell-Fleming Model with a Fixed Exchange Rate, a Rise

question 102

Multiple Choice

In the Mundell-Fleming model with a fixed exchange rate, a rise in the world interest rate will lead income:

• A) and net exports both to fall.
• B) to fall while net exports are unchanged.
• C) to be unchanged and net exports to fall.
• D) and net exports to both be unchanged.

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