In an open economy like Canada's, a fiscal expansion by the government tends to

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A fiscal expansion increases government spending, which leads to an increase in demand for goods and services in the economy. This increase in demand can lead to an appreciation of the currency, as other countries see Canada as a more attractive place to invest. This increase in demand can also lead to higher interest rates, which can discourage private investment. Additionally, the increase in demand for goods and services can lead to increased imports, which can crowd out net exports. Therefore, a fiscal expansion by the government tends to attract foreign capital, appreciate the currency, and crowd out net exports.

In an Open Economy Like Canada's, a Fiscal Expansion by the Government