In the New Keynesian open economy model, if the exchange rate is fixed
A) a change in current total factor productivity increases output.
B) the real interest rate is an effective tool that can be changed by the central bank.
C) fiscal policy is an effective stabilization tool.
D) fiscal policy and monetary policy are powerless.
E) monetary policy is an effective stabilization tool.
Correct Answer:
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Q7: In the monetary small open-economy model, a
Q8: A flexible exchange rate is determined by
A)buying
Q9: In the monetary small open-economy model with
Q10: In the monetary small open-economy model with
Q11: In the monetary small open-economy model with
Q13: In the New Keynesian open economy model,
Q14: The real exchange rate is the
A)domestic currency
Q15: In the monetary small open-economy model with
Q16: The balance of payments is zero
A)only if
Q17: In response to a temporary change in
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