Answer:
“Increase”, “Increase”.
Step-by-step explanation:
Both the blanks will be filled by the word “Increase” because expansionary fiscal policy is implemented to infuse the money in the economy. Therefore, the expansionary fiscal policy includes various tools that increase the money supply in the economy that is tax cut, increase in transfer payments, discounts or rebates, rise in government spending, etc. Here, all these measures will shift the aggregate demand curve rightwards. Resulting, an increase in the real interest rate, and the real exchange rate.