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1.Consider a large open economy under floating exchange rates whereand NX <0 .If the objective of the policymakers is to keep Y at the natural

1.Consider a large open economy under floating exchange rates whereand NX<0.If the objective of the policymakers is to keep Y at the natural level of output and achieve trade balance (i.e., to make NX=0), illustrate and explain what combination of policies should be adopted?

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