Available under Creative Commons-NonCommercial-ShareAlike 4.0 International License.
The net export effect reduces the effectiveness of fiscal policy. When an expansionary fiscal policy is implemented, net exports usually decline which decreases aggregate output. This decrease in aggregate output partially offsets the expansionary fiscal policy. When a contractionary fiscal policy is implemented, net exports will usually increase. This increase in aggregate output partially offsets the contractionary fiscal policy.
- 9538 reads
