Consider that foreign country decreased government expenditures. a) Analyze its effects on net exports and real exchange rate. b) Consider that prices in-home and foreign country did not change. Analyze the effect of a decrease in government expenditures in the foreign country on the nominal exchange rate.

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Chapter6: Managing In The Global Economy
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Consider that foreign country decreased government expenditures.

a) Analyze its effects on net exports and real exchange rate.

b) Consider that prices in-home and foreign country did not change. Analyze the effect of a decrease in government expenditures in the foreign country on the nominal exchange rate.

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