Consider a small open economy operating a fixed exchange, Business Economics

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Consider a small open economy operating a fixed exchange

Consider a small open economy operating a fixed exchange rate. Compare the effects on domestic real GDP of an increase in government spending under each of the following circumstances:

a. Imperfect capital mobility with sterilized intervention.

b. Imperfect capital mobility and unsterilized intervention.

c. Perfect capital mobility.

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Business Economics: Consider a small open economy operating a fixed exchange

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Business Economics: Consider a small open economy operating a fixed exchange

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