The specific factors model assumes that there are ________ goods ...

[Medesa]

The specific factors model assumes that there are ________ goods and ________ factor(s) of production.
 
  A) two; three
  B) two; two
  C) two; one
  D) three; two
  E) four; three

Question 2

Use a figure to explain the potential effectiveness of fiscal policy to spur on the economy under a fixed exchange rate.
 
  What will be an ideal response?

[jliusyl]

Answer to Question 1

A

Answer to Question 2

With an aim toward increasing output, the government could use fiscal policy to shift the DD curve outward. The central bank will have to take steps to maintain a fixed exchange rate , among the options is buying foreign assets with money, to shift the AA schedule outward until the equilibrium at point 3 is reached.

[Medesa]

TYSM

[carlsona147]

Excellent