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Fiscal Multipliers in Open Economies Aggregate Demand: We consider a fictitious economy with fixed prices and flexible exchange rates. Abstracting from investment, the aggregate demand
Fiscal Multipliers in Open Economies Aggregate Demand: We consider a fictitious economy with fixed prices and flexible exchange rates. Abstracting from investment, the aggregate demand in this economy is defined as y=c+g+nx where c is aggregate private consumption, g aggregate government consumption and n net exports. Private consumption follows a Keynesian consumption function, with a and b positive numbers, b
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