-Which of the following options compete to determine whether the current account improves or worsens following a rise in the real exchange rate?
Appreciation and depreciation
Crowding out effect and producers effect
Volume effect and value effect
Colume effect and inflation
-Which of the following options would NOT cause the real exchange rate to rise?
A rise in the exchange rate, E
Depreciation of the home currency
A right shift of the aggregate demand curve
A rise in foreign prices, P
-Monetary expansion causes the current account balance to increase in the short run. Discuss this statement. Is the same true for fiscal expansion?
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