Author Question: Assume perfect capital mobility and a fixed exchange rate system. Then, an increase in government ... (Read 139 times)

crobinson2013 · **on:** Jun 30, 2018

Assume perfect capital mobility and a fixed exchange rate system. Then, an increase in government spending would shift the

a. LM schedule to the left.
b. BP schedule to the right.
c. BP schedule to the left.
d. IS schedule to the right.

Question 2

Today, the Federal Reserve System can contract the money supply by

(a) increasing the discount rate.
(b) increasing reserve requirements.
(c) selling U.S. Treasury and federal agency securities.
(d) engaging in all of the above.