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a) The (home) country has a flexible exchange rate and its current account and financial accounts are in balanced (and assume capital account is always
a) The (home) country has a flexible exchange rate and its current account and financial accounts are in balanced (and assume capital account is always equal to zero). Due to a successful COVID vaccination plan, the economy will reopen its economy earlier than expected and investors perceive the risk of investing in the country is lower than before. What happens to the country's exchange rate, financial account, and current account when the economy reaches its new equilibrium? Explain. (14 points)
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