In the Mundell-Fleming model for a small open economy with flexible exchange rates, if the economy is operating at above the natural level in the short run, then in the long run the price level will rise, the exchange rate will ______, and net exports will ______ to restore the economy to its natural rate. a) depreciate; increase b) appreciate; decrease c) depreciate; decrease d) appreciate; increase

In the Mundell-Fleming model for a small open economy with flexible exchange rates, if the economy is operating at above the natural level in the short run, then in the long run the price level will rise, the exchange rate will , and net exports will to restore the economy to its natural rate. a) depreciate; increase b) appreciate; decrease c) depreciate; decrease d) appreciate; increase

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter34: International Finance

Section: Chapter Questions

Problem 10QP

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