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Consider the short-run impact of the U.S. expansionary monetary policy action on the economy of Mexico, a small open economy with a floating exchange rate
Consider the short-run impact of the U.S. expansionary monetary policy action on the economy of Mexico, a small open economy with a floating exchange rate against the U.S. dollar. a. What is the impact of the U.S. monetary policy action on consumption, investment, and the unemployment rate in Mexico? Explain. b. Are there any other macroeconomic variables in Mexico that would be affected by the U.S. policy? c. Can Mexico counteract the U.S. policy? If not, why not. If so, how and what would be the impact on the Mexican economy
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