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Question 4: [10 points} The graph below shows our model of a simultaneous equilibrium in the moneiglr market and the foreign exchange market of a

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Question 4: [10 points} The graph below shows our model of a simultaneous equilibrium in the moneiglr market and the foreign exchange market of a oountr'g.r {in this case the United States]. In particular, the graph shows how an increase in domestic real GNP affects the dollarfeuro exchange rate and the U.5. interest rate. Explain the logical steps by which a new equilibrium comes about

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