Contrast what happens in the two countries


Two small open economies, Flex and Fixed, can be described by the Mundell-Fleming model. The countries are otherwise identical except that Fixed maintains a fixed exchange rate, while Flex maintains a flexible exchange-rate regime. The governments of both countries increase spending by the same amount. Contrast what happens in the two countries to: a) the exchange rate; b) equilibrium output; c) net exports 

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Macroeconomics: Contrast what happens in the two countries
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