Description
this is the macroeconomy question as soon as possible using your knowledge to answer this 15 question. I will give the other questions once accepted.
1.Economic expansion throughout the rest of the world raises the world interest rate. Explain in words 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. Use the Mundell–Fleming model to determine the impact. However, do not provide diagrams with the answer. (125 words maximum)
2.With the economic uncertainty and job insecurity due to the COVID-19 crisis, many consumers may increase their saving as a precautionary measure. Explain in detail the predicted long-run impact of an increase in national saving on the domestic interest rate, net capital outflow, supply and demand of domestic currency and exchange rate in a large open economy, holding other factors constant. Explain your answer clearly in words. Do not provide diagrams. (125 words maximum

Explanation & Answer

question 14: In an open economy with fixed
exchange rates, fiscal policy is, indeed, more effective than
monetary policy. In fact, monetary policy has absolutely no
...
