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1. Consider an open economy with fixed prices in the short run. The economy is committed to free capital movement, and suppose this economy also
1. Consider an open economy with fixed prices in the short run. The economy is committed to free capital movement, and suppose this economy also follows a xed exchange rate regime. a. Illustrate the constraints imposed by the trilemma on this economy. b. The economy receives a sudden inux of foreign capital. Before doing any diagrammatical analysis, state howr this Will affect its current account. Confirm this With an equilibrium analysis of the effects of this event on the economy
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