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Fiscal expansion under a fixed exchange rate

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Fiscal Expansion under a Fixed Exchange Rate

How does fiscal expansion affect the current account under a fixed exchange rate? Do youexpect the changes in current account to be smaller or larger than under floating (a flexibleexchange rate)? Explain.

Reference no: EM131413867

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Fiscal expansion under a fixed exchange rate : How does fiscal expansion affect the current account under a fixed exchange rate? Do youexpect the changes in current account to be smaller or larger than under floating (a flexibleexchange rate)? Explain.
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