Under a flexible exchange rate system,what will an expansionary fiscal policy lead to?

Question

Quizplus · Accepted Answer

Under a flexible exchange rate system, an expansionary fiscal policy will lead to an increase in aggregate demand, causing inflationary pressure. In response, the central bank may lower interest rates, leading to a decrease in the relative return on domestic assets compared to foreign assets, causing a depreciation of the domestic currency.

Under a Flexible Exchange Rate System,what Will an Expansionary Fiscal