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Consider the case of an exogenous increase in payments


Discussion:

Consider the case of an exogenous increase in payments into a country.

1. In a Mundell- Fleming model, what will be the effects on a country's nominal and real exchange rate and GDP under:

a) Fixable exchange rates

b) Fixed exchange rates with sterilization

c) Fixed exchange rates without sterilization

2. Now answer question 1 using a simple monetary model.'

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Microeconomics: Consider the case of an exogenous increase in payments
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