Order the answer to: Consider the example of small open economies like Belgium and

Academic Help business economics Order the answer to: Consider the example of small open economies like Belgium and

business economics

Order the answer to: Consider the example of small open economies like Belgium and

Question Consider the example of small open economies like Belgium and the Netherlands that have highly mobile financial capital and fixed exchange rates but also have high government budget deficits. Suppose that these countries find themselves in a depressed economic condition, with low output and high unemployment.
Explain why they cannot use monetary policy to stimulate their economies. Why would fiscal expansion be effective if they could tolerate higher budget deficits?
Subject business economics
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