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A,D is not correct according to my grading system, so which one is c.pdf

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The document discusses the correct answer to a question about the exogenous variables in the Mundell-Fleming model. It eliminates choices A and D as incorrect according to the grading system. It determines that choice C, identifying the world interest rate, price level, and exchange rate as exogenous variables, is correct.

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A,D is not correct according to my grading system, so which one is correct?In the Mundell–Fleming model, the exogenous variables are the:A.level of government spending, taxes, and income.B.exchange rate and level of income.C.world interest rate, the price level, and the exchange rate.D.price level, world interest rate, monetary policy, and fiscal policy. A,D is not correct according to my grading system, so which one is correct? Solution The exogenous variables are the variables in the model which are held constant. In this context, the price level is held constant since we use IS-LM model which assumes fixed prices. The model also takes the world interest rate as given. Lastly, the exchange rate is also held constant.C.world interest rate, the price level, and the exchange rate.

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A,D is not correct according to my grading system, so which one is c.pdf

  • 1. A,D is not correct according to my grading system, so which one is correct?In the Mundell–Fleming model, the exogenous variables are the:A.level of government spending, taxes, and income.B.exchange rate and level of income.C.world interest rate, the price level, and the exchange rate.D.price level, world interest rate, monetary policy, and fiscal policy. A,D is not correct according to my grading system, so which one is correct? Solution The exogenous variables are the variables in the model which are held constant. In this context, the price level is held constant since we use IS-LM model which assumes fixed prices. The model also takes the world interest rate as given. Lastly, the exchange rate is also held constant.C.world interest rate, the price level, and the exchange rate.