Under a fixed exchange rate regime, expansionary fiscal policy ...

[erika]

Under a fixed exchange rate regime, expansionary fiscal policy will tend to cause which of the following?
 
  A) an increase in imports
  B) an increase in net exports
  C) a reduction in investment
  D) all of the above

Question 2

In the model where it is assumed that the state of technology does not change, what parameters and/or variables cause changes in steady state output per worker.
 
  What will be an ideal response?

[moormoney]

Answer to Question 1

A

Answer to Question 2

In general, output per worker will depend on the capital-labor ratio. The equilibrium capital-labor ratio will depend on the saving rate and on the rate of depreciation. Output will also depend on the amount of human capital per worker. So, changes in s, , and H will cause changes in output per worker.

[erika]

YES! Correct, THANKS for helping me on my review

[sailorcrescent]

Excellent