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Please help with a detailed response and explanation Consider an open economy (call it domestic country) that Operates under the exible exchange rate regime. We

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Consider an open economy (call it domestic country) that Operates under the exible exchange rate regime. We approximate net exports with NX = dtl" - dgl' + d3e, where Y' is foreign output, Y is domestic output, and e is the real exchange rate. Parameter d3 summarizes the net effect of real exchange rate on net exports, and d1 and d2 are both positive. Consumption and investment are respectively C = ca + c1(Y - T) and I = blY - bzr, where T is net tax and r is the real policy interest rate. We assume that d2

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