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Draw an IS-LM graph to show the effects of the following changes. Label your axes and curves. Assume a small country with perfect capital markets.
Draw an IS-LM graph to show the effects of the following changes. Label your axes and curves. Assume a small country with perfect capital markets. Closed Economy - Expected deflation increases -Autonomous consumption increases Open Economy - Flexible Exchange Rates - Investment decreases due to a decrease in business confidence -The money supply increases Open Economy - Fixed Rates - Government purchases of goods and services increase - The government devalues the exchange rate
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