Friday, August 5, 2011

In an open economy fiscal policy is effective in raising demand when the exchange rate is fixed or flexible?

In an exam there was a question asking about raising demand when using the fiscal policy.....there was a statement, this year was "in the open economy fiscal policy is effective in raising demand when the exchange rate is fixed" and the following year it was "....exchange rate is flexible"....then you had to state true or false followed by an explanation..any ideas?

No comments:

Post a Comment