mundell fleming model

CFA Level II Economics
#1

Just a quick one-

Is it true that we kind of assume free mobility if we are assuming the mundell-fleming model…I thought I came across a question that implied that, without being told explicitly, we need to assume free capital mobility & conclude that expansionary fiscal policy increase the currency value.

Thanks

#2

Don’t recall that being something we were to assume. Is there any explicit mention of this in the curriculum?

#3

We don’t assume anything. Can you please post that question?

#4

wikipedia does suggest that the model has some assumptions:

one of them being capital mobility is perfect

https://en.wikipedia.org/wiki/Mundell–Fleming_model

#5

thanks all.