The chapters discussion of Inflation Bias and Other Problems of Policy Formulation suggests (page 441, paragraph 4)

Question:

The chapter’s discussion of “Inflation Bias and Other Problems of Policy Formulation” suggests (page 441, paragraph 4) that there may not really be any such thing as a permanent fiscal expansion. What do you think? How would these considerations affect the exchange rate and output effects of fiscal policy? Do you see any parallels with this chapter’s discussion of the longer-run impact of current account imbalances?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...