ECON 1110 Problem Set 07

ECON 1110 Problem Set 07 - 2. Explain the difference...

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ECON 1110 Intermediate Macroeconomics Problem Set 7 Spring 2011 1. Review all examples analysed in lectures. You should be able to replicate and thoroughly explain the 4 scenarios of the Mundell-Fleming Model. You should also practice the same situations with contractionary, rather than expansionary, policy. Contractionary policy is the mirror image of the examples given in class.
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Unformatted text preview: 2. Explain the difference between fixed and flexible exchange rates. Pay particular attention to the role of the central bank. 3. Describe the Bretton Woods system of fixed exchange rates that was set up at the end of WWII and lasted until 1973. 4. What are the advantages and disadvantages of fixed exchange rates?...
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