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Lesson 9 and 10

Authored by Leesha Ms.Leesha Fahmy

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University

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Lesson 9 and 10
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20 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the Mundell-Fleming model primarily analyze?

Closed economy monetary policy

Open economy with trade and capital flows

Inflation targeting in a closed economy

Fiscal policy effectiveness only

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the Mundell-Fleming model, what key assumption is made about capital mobility?

Capital is immobile internationally

Perfect capital mobility exists

Capital mobility is restricted by tariffs

Capital moves only within domestic borders

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In an open economy, aggregate demand (AD) includes which of the following components?

C + I + G

C + I + G + (X - M)

C + G + NX only

I + G only

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

According to the Mundell-Fleming model, investment depends negatively on:

The real interest rate

The nominal exchange rate

Government spending

Disposable income

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the uncovered interest parity (UIP) condition state?

Domestic interest rates are always higher than foreign rates

Exchange rates are fixed by the government

Domestic and foreign assets offer the same expected return when measured in the same currency

Capital flows are restricted

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Under floating exchange rates, which policy is generally more effective in influencing output?

Wage policy

Trade policy

Fiscal policy

Monetary policy

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to the exchange rate after an expansionary fiscal policy in a small open economy with floating exchange rates?

It depreciates

It remains unchanged

It appreciates

It fluctuates unpredictably

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