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Show how the IS, LM and BOP curves move in the United States under the following hypothetical scenarios (assume that US has substantial unemployment, a
Show how the IS, LM and BOP curves move in the United States under the following hypothetical scenarios (assume that US has substantial unemployment, a flexible exchange rate regime and high international capital mobility). Examine each case separately.
a)The FED increases interest rates significantly.
b)Canada imposes import restrictions against US goods.
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