In the Mundell-Fleming model with fixed exchange rates, the imposition of trade restrictions results in an increase in net exports because:
A) investment increases.
B) investment decreases.
C) saving increases.
D) saving decreases.

Question

Quizplus · Accepted Answer

In the Mundell-Fleming model with fixed exchange rates, trade restrictions can lead to an increase in net exports as they reduce imports, which can increase domestic savings.

In the Mundell-Fleming Model with Fixed Exchange Rates, the Imposition