What is the impact of a permanent fiscal expansion on aggregate output, nominal exchange rate, real...

 

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What is the impact of a permanent fiscal expansion on aggregate output, nominal exchange rate, real exchange rate, and domestic prices in the short run and long run under a. A floating exchange rate regime b. A fixed exchange rate regime Assume that before the policy change: ) i. aggregate output is at full employment level and ii. ii nominal exchange rate is not expected to change in the future What is the impact of a permanent fiscal expansion on aggregate output, nominal exchange rate, real exchange rate, and domestic prices in the short run and long run under a. A floating exchange rate regime b. A fixed exchange rate regime Assume that before the policy change: ) i. aggregate output is at full employment level and ii. ii nominal exchange rate is not expected to change in the future

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a Floating Exchange Rate Regime In the short run a permanent fiscal expansion under a floating exchange rate regime would lead to the following impacts Aggregate Output The fiscal expansion increases ... View the full answer