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Log into your account. Fixed Rate with Sterlization. Consider the case of an exogenous increase in payments into a country.In a Mundell Fleming model , what will be the effects on a country’s nominal and real exchange rate and GDP. Both IS-LM and model analyze the situation in an economy on the short run. The equation which explains the IS curve is represented by:. Y= C(Y-T) I(i) G NX(e),. Where the used variables are:. Y National income (GDP). T – Taxes. E Nominal Exchange Rate. M Nominal money supply.
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