International capital market and fixed exchange rate system

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Reference no: EM1367191

The central bank lowers discount to rise the nation's monetary base. The country has highly mobile international capital markets and a fixed exchange rate system. Use the three sector model to solve the following problems.
12.3. The current account will ______ and the financial/capital account will _______.
A. fall, fall
B. fall, rise
C. rise, rise
D. rise, fall

Reference no: EM1367191

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