Consider a country under afixed exchange ratethat is open to capital mobility (UIP holds).Is there a combination of changes in government spending (G) and monetary policy (i.e. changes in money supplyMs) the government can use toincreasethe trade balance while keeping output (Y) unchanged?

Select one:

there is no combination of policies that can increase the TB without changing output.

decreaseGand decreaseMs

decreaseGand increaseMs

increaseGand decreaseMs

increaseGand increaseMs