Essay
What happens in the short run in the Keynesian model to the exchange rate and net exports in each of the following cases?
(a)The foreign real interest rate falls.
(b)Foreign output rises.
(c)Foreign demand for domestic goods rises.
(d)Domestic output rises.
(e)The domestic real interest rate falls.
Correct Answer:
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(a)Exchange rate rises,net exports fall....View Answer
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