In a global economy, a problem with using expansionary fiscal and monetary policies to fix the problems in our country is that they can lead to retaliatory actions by other nations.

Question

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Other countries may view these policies as currency manipulation or unfair advantages in trade, and may respond with their own policies or trade barriers that could harm our economy further. Thus, expansionary fiscal and monetary policies may have unintended consequences in a global economy.

In a Global Economy, a Problem with Using Expansionary Fiscal