The Mundell-Fleming model is an extension of the IS-LM model that includes the joint determination of net exports and currency value. It suggests that fiscal expansion with monetary contraction would boost the currency value and reduce net exports, while fiscal contraction and monetary expansion would boost net exports and reduce the currency value. However, expectations play a major role in determining outcomes. Under Reagan, expectations of growth from tax cuts led to a higher dollar and lower net exports, while under Clinton, expectations of growth from spending cuts had the same effect despite different policies.
![The Mundell-Fleming Model ,[object Object],[object Object],-NOSSCIRE-](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)