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3.1. Under a fixed exchange rate system and perfect capital mobility an increase in foreign interest rates will cause the level of domestic output to
3.1. "Under a fixed exchange rate system and perfect capital mobility an increase in foreign interest rates will cause the level of domestic output to rise." Comment on this statement. (4)
3.2. Define or describe the following concepts. (6) (a) Macroeconomics (b) Stagflation (c) Phillips curve (d) Okun's law (e)Marshall-Lerner condition
3.3 The Namibia economy is currently in a recession. At the same time, inflation has been falling. Use the IS-LM model to describe two reasons why this may have occurred. (10)
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