Question
Under a fixed exchange rate system with perfect capital
mobility, what happens when the government increases its spending?Solution
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.
How is I related to K?
Whose income is the second highest?
How many person sits between A and L, when counted left of L?
How many persons are sitting around the circular table?
Among E, G, H, I, J and K, who is second to the left of G if all are sitting around a circular table facing the centre.
I. J sits third to left o...
Who among the following doesn’t face same direction as T?
I. V
II. U
III. B
Who sits immediate right of the person, who sits 3rd to the right of S?
If L sits second to the left of O then how many seats are between L and R when counted from the right of R?
Which of the following statement is true?
How many persons are facing away from the center?
