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    Exam 18: Macroeconomic Policy and Floating Exchange Rates
  5. Question
    Why Is Fiscal Policy Relatively Ineffective If Exchange Rates Are
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Why Is Fiscal Policy Relatively Ineffective If Exchange Rates Are

Question 9

Question 9

Essay

Why is fiscal policy relatively ineffective if exchange rates are allowed to adjust to their equilibrium level?

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In an open economy with capital mobility...

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