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depreciation in a sma… Show more Suppose that the Internat

Paper help Economics depreciation in a sma… Show more Suppose that the Internat

Economics

depreciation in a sma… Show more Suppose that the Internat

depreciation in a sma… Show more Suppose that the International Monetary Fund (IMF) is concerned about currency depreciation in a small open economy. a. What type of fiscal policy should the IMF propose to the government of the small open economy to generate a currency appreciation? b. Illustrate graphically the impact of the IMF proposal on the exchange rate of the small open economy. c. What will happen to the trade balance of the small open economy, assuming that it started from a position of balanced trade? • Show less

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