b) Since this is a permanent policy measure, describe the convergence process of the economy towards long-run equilibrium. Be sure to include the role of expectation in this process. What happens to inflation ultimately in the long run? 2. Suppose global manufacturing patterns shift, and Thailand, a small open economy, experiences a bigger influx of foreign firm production. a) Assume Thailand allows their currency, the Baht, to float. As demand for Thai- produced goods increases, use the open IS/LM model to describe the short-run impact on income and the value of the baht