An increase in the U.S.money supply would cause the value of the dollar to ________ and U.S.net exports to ________ in the short run using a Keynesian model.

Question

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An increase in the U.S. money supply would cause the value of the dollar to fall and U.S. net exports to rise in the short run using a Keynesian model. This is because an increase in the money supply would lead to a decrease in interest rates, which would make it more attractive for foreigners to invest in the U.S., leading to an increase in the demand for dollars and a rise in the value of the dollar. This would make U.S. exports more expensive and imports cheaper, leading to a decrease in net exports.

An Increase in the U