Assume that you work at the central bank of a small country that is considering an expansionary monetary policy to speed up the level of economic activity. Given fi xed exchange rates, advise the...

Assume that you work at the central bank of a small country that is considering an expansionary monetary policy to speed up the level of economic activity. Given fi xed exchange rates, advise the president of your country what will happen to net exports if the country pursues a policy of monetary expansion. What action will the central bank have to take to support the agreed- upon exchange rate? How will that action affect the expansionary policy?