Business executives and policymakers are often concerned about the “competitiveness” of Canadian industry (the ability of Canadian industries to sell their goods profitably in world markets). a. How would a change in the nominal exchange rate affect competitiveness in the short-run when prices are sticky? b. Suppose you wanted to make domestic industries more competitive but did not want to alter aggregate income. According to the Mundell–Fleming model, what combination of monetary and fiscal policies should you pursue?
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