In a small open economy with flexible exchange rates , an increase in government ' s purchases
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Question:
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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