How does a monetary expansion affect net exports

Reference no: EM131133275

In this chapter, we showed that a monetary expansion in an economy operating under flexible exchange rates leads to an increase in output and a depreciation of the domestic currency.

a. How does a monetary expansion (in an economy with flexible exchange rates) affect consumption and investment?

b. How does a monetary expansion (in an economy with flexible exchange rates) affect net exports?

Reference no: EM131133275

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