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Consider a small open economy in the Mundell-Fleming model with a fixed exchange rate regime. If the government imposes trade restrictions, in the new equilibrium,
Consider a small open economy in the Mundell-Fleming model with a fixed exchange rate regime. If the government imposes trade restrictions, in the new equilibrium, the trade balance (i); and the output (ii). (i) increases; (ii) stays constant (i) increases; (ii) increases. (1) increases; (ii) decreases. (i) stays constant; (ii) decreases
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