1. Compared to a closed economy, an open economy is one that:
A) allows the exchange rate to float.
B) fixes the exchange rate.
C) trades with other countries.
D) does not trade with other countries.
2. The MundellFleming model assumes that:
A) prices are
1. John Maynard Keynes wrote that responsibility for low income and high unemployment
in economic downturns should be placed on:
A) low levels of capital.
B) an untrained labor force.
C) inadequate technology.
D) low aggregate demand.
2. According to clas
1. The interaction of the IS curve and the LM curve together determine:
A) the price level and the inflation rate.
B) the interest rate and the price level.
C) investment and the money supply.
D) the interest rate and the level of output.
Use the followin