A country with a fixed exchange rate has achieved external balance. Government spending then increases in an
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A country with a fixed exchange rate has achieved external balance. Government spending then increases in an effort to reduce unemployment. What is the effect of this policy change on the country's official settlements balance? If the central bank uses unsterilized intervention to defend the fixed rate, will intervention tend to reduce the expansionary effect of the fiscal policy?
Discuss. 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...
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The increase in government spending affects both the current account and the financial account of the countrys balance of payments The increase in gov...View the full answer
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