. Consider an open economy with a flexible exchange rate regime, perfect capital mobility and fixed… Show more . Consider an open economy with a flexible exchange rate regime, perfect capital mobility and fixed prices both home and abroad. Discuss each of the following: (i) The process of adjustment of the economy to an increase in foreign output ii) The effect on the trade balance and possible automatic adjustments iii) The intervention required by the Central Bank to maintain the exchange rate fixed HELP?! • Show less