Economics · Macroeconomics
In a Keynesian open economy model (Mundell-Fleming framework) with perfect capital mobility, an expansionary fiscal policy under flexible exchange rates is likely to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Lead to currency appreciation and reduce net exports✓
- 2Be fully offset by automatic monetary policy tightening
- 3Cause crowding-in of private investment due to increased net exports
- 4Lead to currency depreciation and boost net exports
Correct answer
Lead to currency appreciation and reduce net exports
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Macroeconomics MCQs →Want more practice questions on Macroeconomics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Macroeconomics