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Question 2: If the government of a small open economy wants to correct its trade deficit in the long run, which kind of policy should it pursue? Explain. 5₂ Loanable funds market Sº S*. I*.0 Iº(r) -I, S Foreign exchange market (S-1)⁰ NX*0 NX°(E) NX

Question 2: If the government of a small open economy wants to correct its trade deficit in the long run, which kind of policy should it pursue? Explain. 5₂ Loanable funds market Sº S*. I*.0 Iº(r) -I, S Foreign exchange market (S-1)⁰ NX*0 NX°(E) NX

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 2: If the government of a small open economy wants to correct its trade deficit in the long run, which kind of policy should it pursue? Explain. r rw Loanable funds market Sº S*, I*.0 Iº(r) -I, S Foreign exchange market (S-1)⁰ NX*,0 NX°(E) NX
Transcribed Image Text:Question 2: If the government of a small open economy wants to correct its trade deficit in the long run, which kind of policy should it pursue? Explain. r rw Loanable funds market Sº S*, I*.0 Iº(r) -I, S Foreign exchange market (S-1)⁰ NX*,0 NX°(E) NX
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