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#2 a. Use the ISLM to illustrate the impact on Y, i, E, and the trade balance if there was a sudden temporary increase in

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#2 a. Use the ISLM to illustrate the impact on Y, i, E, and the trade balance if there was a sudden temporary increase in consumer confidence (they feel better about their job prospects and debt levels). Draw the shock, and then explain what happened to each variable. b. do the same as in a), but assume that the home country has a xed exchange rate maintained by the central bank

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