Explain mundell fing model in fundamentals of economic

1.	Explain mundell fing model in fundamentals of economic
Answer» Answer: The model explains the causes of short-run fluctuations in aggregate income (or, what comes to the same thing, shifts in the ad curve) in an open economy. ADVERTISEMENTS: The Mundell-Fleming model is BASED on a very restrictive assumption. It CONSIDERS a SMALL open economy with perfect capital mobility. Mundell-Fleming model has a wide range of APPLICATIONS: among other benefits, it helps us to understand how the choice between a fixed or variable exchange rate affects the efficiency of economic policies in an economy that is open to international trade, allows us to anticipate the effects of the REMOVAL of ...

Answer»

Answer:

The model explains the causes of short-run fluctuations in aggregate income (or, what comes to the same thing, shifts in the ad curve) in an open economy. ADVERTISEMENTS: The Mundell-Fleming model is BASED on a very restrictive assumption. It CONSIDERS a SMALL open economy with perfect capital mobility.

Mundell-Fleming model has a wide range of APPLICATIONS: among other benefits, it helps us to understand how the choice between a fixed or variable exchange rate affects the efficiency of economic policies in an economy that is open to international trade, allows us to anticipate the effects of the REMOVAL of ...

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