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Macroeconomics question, please help Based on your graphical analysis, explain whether the policy recommendation of reducing the budget deficit will work. With budget deficit reduction,

Macroeconomics question, please help

image text in transcribed Based on your graphical analysis, explain whether the policy recommendation of reducing the budget deficit will work. With budget deficit reduction, do we obtain an appreciation in the Canadian goods relative to foreign goods (the Canadian real exchange rate)? Specifically state what happens to the real exchange rate and the trade balance as a result of the Canadian government budget deficit reduction

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