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In a fixed-exchange-rate system, if the government takes no action, an increase in the world demand for domestic goods will reduce net exports and create

In a fixed-exchange-rate system, if the government takes no action, an increase in the world demand for domestic goods will reduce net exports and create an undervalued domestic currency reduce net exports and create an overvalued domestic currency increase net exports and create an overvalued domestic currency increase net exports and create an undervalued domestic currency. In the IS-LM model, this shock is most likely to directly affect which curve? LM curve IS curve FE line

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