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C=800+0.8(-) I=900-50 NX=50050 MP=-125 G=500 T=500 M=6000 P=3 r*=8 c. Assume a floating exchange rate. Calculate what happens to the exchange rate, the level of

C=800+0.8(-)

I=900-50

NX=50050

MP=-125

G=500

T=500

M=6000

P=3

r*=8

c.Assume a floating exchange rate. Calculate what happens to the exchange rate, the level of income, net exports, and the money supply if the government reduces its spending by 150.

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