question archive In the diagrammatic representation of the Mundell-Fleming model with imperfect capital mobility, the BP locus represents the set of values of the interest rate and income which are compatible with balance of payments equilibrium
In the diagrammatic representation of the Mundell-Fleming model with imperfect capital mobility, the BP locus represents the set of values of the interest rate and income which are compatible with balance of payments equilibrium
Subject:EconomicsPrice: Bought3
In the diagrammatic representation of the Mundell-Fleming model with imperfect capital mobility, the BP locus represents the set of values of the interest rate and income which are compatible with balance of payments equilibrium. Which of the following is not a Jorrect statement about the locus? A. It is upward sloping because a higher interest rate is needed to generate a capital account surplus to offset a current account deficit caused by a higher level of income. B. It will shift rightwards if the exchange rate depreciates. C. It will shift rightwards if foreign income increases. D. It will shift leftwards if foreign income increases OE. It will shift upwards if the foreign interest rate increases.
