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If counter-cyclical fiscal policy is used to eliminate an inflationary gap, what effect will it have on interest rates and the exchange rate? Both will

If counter-cyclical fiscal policy is used to eliminate an inflationary gap, what effect will it have on interest rates and the exchange rate? 


Both will fall. 


Both will rise 


Interest rates will rise and the exchange rate will full 


Interest rates will fall and the exchange rate will rise.

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