The Mundell-Fleming model shows
A) How a nation can use fiscal and monetary policy to achieve both internal and external balance without any change in the exchange rate
B) How a nation can use fiscal policy to achieve both internal and external balance without any change in the exchange rate
C) How a nation can use monetary policy to achieve both internal and external balance with a corresponding change in the exchange rate
D) How a nation can use fiscal policy to achieve both internal and external balance with a complementary change in the exchange rate
Correct Answer:
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A)
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