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Basic Question 0 of 7
According to the Mundell-Fleming model under conditions of high capital mobility, the effect of the combination of an expansionary monetary policy and fiscal policy is:
B. domestic currency depreciates.
C. it is hard to say if the domestic currency will depreciate or appreciate.
A. domestic currency appreciates.
B. domestic currency depreciates.
C. it is hard to say if the domestic currency will depreciate or appreciate.
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Martin Rockenfeldt
Learning Outcome Statements
explain the potential effects of monetary and fiscal policy on exchange rates;
CFA® 2024 Level II Curriculum, Volume 1, Module 8.