Which of the panels illustrates the impact of contractionary fiscal policies at home on the real exchange rate?

Economics: Private and Public Choice (MindTap Course List)
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ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter19: International Finance And The Foreign Exchange Market
Section: Chapter Questions
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Exhibit: Policies Influence Real Exchange Rate
(A)
Real
exchange
rate, €
Real
exchange
rate, €
S₁-1 S₂-1
NX
NXNX₂ Net exports
(C)
S-1₂ S-1₁
Real
exchange
rate,
NX
NXNX₁ Net exports
Real
exchange
rate, €
S-16) S-1(r))
(B)
NX, NX
S-I
NX
(D)
NX₂
NX₁
Net exports
Which of the panels illustrates the impact of contractionary fiscal policies at
home on the real exchange rate?
NX
Net exports
Transcribed Image Text:Exhibit: Policies Influence Real Exchange Rate (A) Real exchange rate, € Real exchange rate, € S₁-1 S₂-1 NX NXNX₂ Net exports (C) S-1₂ S-1₁ Real exchange rate, NX NXNX₁ Net exports Real exchange rate, € S-16) S-1(r)) (B) NX, NX S-I NX (D) NX₂ NX₁ Net exports Which of the panels illustrates the impact of contractionary fiscal policies at home on the real exchange rate? NX Net exports
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