Suppose that the price level is currently too high to allow the economy to produce the natural rate of output. The Mundell–Fleming model in the long run predicts that the price level will decrease, causing the LM* curve to shift _____ in order to bring the economy to equilibrium.to the rightto the leftupwarddownward

The Mundell-Fleming model assumes that price levels are:  A. Sticky in the short run and flexible in the long run  B. Flexible in the short run and sticky in the long run  C. Completely fixed in both the short and long run  D. Independent of changes in output and employment

The Mundell–Fleming model predicts that, ine–Y space, an appreciation of the exchange rate will cause the LM* curve to:shift to the left.shift to the right.remain unchanged.become steeper.

If gross domestic product is above the natural rate, the price level will increase in the long run. This will cause the LM curve to:shift to the left.shift to the right.not move.move downward.

A higher price level will shift the LM curve:to the left.to the right.upward.downward.

Select the statement which incorrectly explain the behavior of the economic impact under Mundell-Fleming Model.A.1.      In a small open economy with fixed exchange rate, IS* and LM* curves will shift to right under expansionary fiscal policy and output is increased.B.1.      In a small open economy with fixed exchange rate, monetary policy is ineffective while fiscal policy is effective.C.1.      In a small open economy with floating exchange rate, monetary policy is effective while fiscal policy is ineffective.D.1.      In a small open economy with floating exchange rate, IS* curve will shift to right under expansionary fiscal policy and output is increased.