Question: In a small open economy with flexible exchange rates , an increase in government ' s purchases of goods and services would have _________ effects

In a small open economy with flexible exchange rates, an increase in government's purchases of goods and services would have _________ effects on domestic GDP and ____________ effects on the domestic interest rate in the short run, according to the Mundell-Fleming model.

A.positive; positive

B.positive; no

C.no; no d

D.no; positive

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