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Answer to Question #79274 in Other Economics for Raylen ville

Question #79274
Using appropriate diagrams distinguish between the effect of a expansionary monetary policy in the short and long run
Expert's answer
The effect of an expansionary monetary policy is to lower the exchange rate, weaken the financial account and strengthen the current account.
In the long run, the main effect of the expansionary monetary policy is a lowering of the nation's currency exchange rate, which is the international equivalent to the long-run effect of expansionary monetary policy, inflation.

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