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Suppose that Y = Y(bar), NX < 0, and G > T in the U.S.Using the large open economy model, illustrate and explain how the
Suppose that Y = Y(bar), NX < 0, and G > T in the U.S.Using the large open economy model, illustrate and explain how the policymakers, using a combination of monetary, fiscal, and trade policies, can reduce the trade deficit, decrease the government's budget deficit, and increase the level of domestic investment, while keeping Y at Y (bar)and without changing the exchange rate.
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