Question: Explain how the flexible exchange rate acts as an automatic stabilizer in the Mundell-Fleming small open economy model of the short run (with completely sticky

Explain how the flexible exchange rate acts as an automatic stabilizer in the Mundell-Fleming small open economy model of the short run (with completely sticky goods prices) by thinking about the effects of a positive terms of trade shock (in which autonomous net exports NX₀ increases), particularly in the context of Canada when world real commodity prices increases.

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