In the Mundell-Fleming model, all of the following are true EXCEPT: a

In the Mundell-Fleming model, all of the following are true EXCEPT:

a. the intersection of the IS and LM curves determine the equilibrium exchange rate.
b. the BP curves position is determined by the exchange rate.
c. the policy choice between fixed and floating exchange rates shifts the BP curve.
d. the extent of capital mobility determines the slope of the BP curve.
e. all of the above are true.

ANSWER

A