Suppose there is a decline in foreign income due to a recession. What is the impact on the domestic economy? What is the effect on domestic output and net exports? Be sure to include the IS-LM-UIP diagrams in your answer.What happens when there is an expansionary monetary policy under flexible exchange rates to the exchange rate interest rate consumption investment and net exports? Be sure to include the IS-LM-UIP diagrams in your answer.True False Uncertain Explain. Foreign investors expect the US dollar to depreciate against the Swiss Franc over the coming year. This implies one year interest rates in the US will be higher than in Switzerland. Use the uncovered interest parity condition equation in your answer.
