In your opinion do government policies to stabilize real domestic production have a larger role to play in the IS-LM-FE model or in the monetary approach to the balance of payments? Why? (Note: This question is an extension of the analysis. It is not covered explicitly in the book.)
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Q48: Suppose the United States' imports substantially affect
Q49: For a small country with closed economy,
Q50: The volume of imports is positively related
Q51: Expansionary fiscal policy will cause the IS
Q52: With its rapid growth of production and
Q54: A vertical FE curve indicates perfect capital
Q55: Use the standard IS-LM-FE framework and assume
Q56: The European Union has relatively large production
Q57: Expansionary monetary policy will cause the FE
Q58: Describe weaknesses of the IS-LM-FE model.
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