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Assignment 2: The Net Exports Effect
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M5 Assignment 2 Discussion

Assignment 2: The Net Exports Effect

The “net exports effect” is the impact on a country’s total spending caused by an inverse relationship between the price level and the net exports of an economy. Using this principle, discuss how the following economic variables change during an economic expansion:

  • The balance of payments
  • The rate of interest
  • The value of the dollar

In your answer, also discuss the case in the context of both a flexible exchange rate and a fixed exchange rate.

By the due date assigned, post your initial discussion response in the Discussion

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  • Assignment 2: The Net Exports Effect

    Net- export effect Name Institution Net export Effect It acts as one of the three indicators of inverse relationship between aggregate expenditure to price levels, it works in a way

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