Expansionary fiscal policy definitely raises the exchange rate.

Name: Expansionary fiscal policy definitely raises the exchange rate.
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Question

Quizplus · Accepted Answer

Expansionary fiscal policy can lead to a higher exchange rate if it causes interest rates to rise, attracting foreign capital and increasing demand for the domestic currency. However, its effect on the exchange rate is not definite and can be influenced by various factors, including the reactions of foreign exchange markets and monetary policy responses.

Expansionary Fiscal Policy Definitely Raises the Exchange Rate