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(1) Use a figure to study the following question: Imagine that the economy is at a point on the DD-AA schedule that is above both
(1) Use a figure to study the following question: Imagine that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the output and asset markets are out of equilibrium. Explain what will happen next.
(2) What are the causes and consequences of currency fluctuations in international financial markets, and how can individual investors and companies protect themselves from these risks?
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