We are people who don't like owing others Money and don't find joy in cheating people of their money.
Tuesday, February 9, 2010
Hi all this is the post where everybody will post their questions on. Do not choose the other blog posts. To post your question, please click on comment and post there. Thankssssssssssssss.
A country faces perfect capital movement. It operates under the flexible exchange rate regime. The government decides to try an expansionary fiscal policy. The country must be facing a recession. an inflation. full employment. cannot be determined.
Similar quantums of expansionary fiscal policy (with fixed exchange rates) or expansionary monetary policy (with flexible exchange rates) can result in the same changes in output. Additionally, interest rates do not change if they are applied with perfectly free capital movements. Both these policies will be relatively more effective if money demand is relatively more interest sensitive. money demand is relatively more interest insensitive. is in a liquidity trap. none of the above.
http://www.facebook.com/topic.php?uid=113251722654&topic=11518
ReplyDeleteHere's where you can get some answers. First posted question's answer is B. The rest, not sure. =O
FIRST 4 POSTED QNS. LAST QN IS REPEATED.
ReplyDeleteBDDA
A country faces perfect capital movement.
ReplyDeleteIt operates under the flexible exchange rate regime.
The government decides to try an expansionary fiscal policy.
The country must be facing
a recession.
an inflation.
full employment.
cannot be determined.
vishal said C
ReplyDeleteSimilar quantums of expansionary fiscal policy (with fixed exchange rates) or
ReplyDeleteexpansionary monetary policy (with flexible exchange rates)
can result in the same changes in output.
Additionally, interest rates do not change if they are applied with perfectly free capital movements.
Both these policies will be relatively more effective if
money demand is relatively more interest sensitive.
money demand is relatively more interest insensitive.
is in a liquidity trap.
none of the above.