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In a fixed exchange rate system with perfect capital mobility, an increase in government spending shifts the IS curve to the right, increasing output and the interest rate. However, because capital is perfectly mobile, the higher domestic interest rate would attract foreign capital, leading to upward pressure on the exchange rate (appreciation). To maintain the fixed exchange rate, the central bank intervenes by increasing the money supply, which shifts the LM curve to the right, lowering the interest rate back to the world interest rate.
Which regulatory body introduced the asset class under which Mutual Funds Lite (MF Lite) schemes would fall, offering greater flexibility to investors i...
Find the ODD one out from the given options.
Which organization oversees the Unified Recovery Interface (URI) aimed at improving banks' recovery processes?
What is the primary role of SECL's Post-Retirement Benefit (PRB) Cell?
What was the percentage decline in Indian companies' foreign borrowings in 2024?
Which state government has increased the upper age limit by five years for the government job aspirants from the year 2022?
What achievement did Aman Sehrawat accomplish at the Paris 2024 Olympics?
Which flying squirrel resurfaced in Arunachal Pradesh recently, and when was it last described?
PM Mitra Mega Textile Park will be set up in how many states?
The World Bank has approved a grant of _____ to set up an integrated road safety enforcement system in Shimla and Nurpur police districts and develop ...
