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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.
The pH of a neutral solution is —
The most reactive among the halogens is-
_________is the process in which acids and bases react to form salts and water.
Formation of ozone hole is maximum over
Manganite is an ore/mineral of
Petroleum is a mixture of-
Milk tastes sour when kept in the open for sometimes due to the formation of-
The nucleus of an atom consists of-
The gas usually causing explosions in coal mines is-
The gas used for filling weather balloons is-