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In a news article on 4th May, CNBC reports on its website that The U.S. trade deficit hit a fresh record high in March as

In a news article on 4th May, CNBC reports on its website that

"The U.S. trade deficit hit a fresh record high in March as consumers flush with government cash spurred a continuing demand for foreign-made goods."

Using the macroeconomic model for the open economy with clearly illustrated diagrams, analyse what will the situation reported in this piece of news do to the U.S. exchange rate, real interest rate and net capital outflow.

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