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Output is more stable under a fixed exchange rate than under a floating exchange rate (the latter with constant money supply) if the predominant source
Output is more stable under a fixed exchange rate than under a floating exchange rate (the latter with constant money supply) if the predominant source of shocks to the economy are
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shifts in money demand (L( i,Y )shifts over time for any fixedi,Y)
changes in government spending and taxes
shifts in investment demand
changes in foreign output
shifts in consumption demand
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