Business, 12.04.2021 22:40 kylabreanne120

The government of Pangea, a small open economy with a flexible exchange rate, has increased government spending by $20 billion. Economists argue that after the crowding‑out effect on investment and the crowding‑out effect on net exports, the increases in government spending will not affect aggregate demand. Arrange each statement in the proper sequence of events, from first to last, to illustrate the reasoning behind this argument. a. Reduction in net exports due to the appreciation of the domestic currency
b. Increased exchangrate due to increased demand for domestic currency for investment
c. Increased intérest rate due to increased demand for money in response to increased aggregate demand

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The government of Pangea, a small open economy with a flexible exchange rate, has increased governme...

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