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2. Suppose the central bank of a country is worried about the economy overheating so it enacts a contractionary monetary policy (reducing the money supply

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2. Suppose the central bank of a country is worried about the economy overheating so it enacts a contractionary monetary policy (reducing the money supply and raising interest rates): 2D. Suppose instead the central bank does not sterilize the intervention. Explain what would happen and illustrate the effects on both the IS-LM-BOP graph and foreign exchange market graph, explaining why the curves shift and the effects on GDP, interest rates, and the current account and capital account. (You can use the same graphs but label your graphs carefully showing both the effect of 2A as point 1 and the new point labeled as 2). 2E. Explain the Trilemma. How is the Trilemma related to your answer in 2D

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