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In the Mundell-Fleming Model

Question 2

Multiple Choice

In the Mundell-Fleming model:


A) the exchange-rate system must have a floating exchange rate.
B) the exchange-rate system must have a fixed exchange rate.
C) it makes no difference whether the exchange-rate system has a floating or a fixed exchange rate.
D) the behaviour of the economy depends on whether the exchange-rate system has a floating or fixed exchange rate.

Correct Answer:

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