Economic expansion throughout the rest of the world raises the world interest rate. Use the Mundell–Fleming model to illustrate
graphically the impact of an increase in the world interest rate on the exchange rate and level of output in a small open economy with a floating-exchange- rate system.
Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium levels; iv. the direction the curves shift; and v. the new short-run equilibrium.
Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium levels; iv. the direction the curves shift; and v. the new short-run equilibrium.
1 answer:
Answer: The answer is provided below
Explanation:
The fiscal expansion in the rest of the world will lead to an increase in the world interest rate and a decrease in the domestic investment.
As a result, a rise in the world interest rate will lead to an increase in the national income and also lower the nominal exchange rate.
The diagram has been attached.
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Answer:
$8,000, and she has to complete 60 days
Explanation:
Whenever money has to be taken out of the first plan, then it is the requirement of IRA to complete the rollover within 60 days, also the amount to be withheld is 20% this is in the case where the amount is directly paid o the concerned participant. Then the person concerned for such payment has to keep 20%
Here in the instance Total amount = $10,000
20% of such = $2,000
Thus, amount received from the administrator = 80% = $10,000 80% = $8,000