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There is a country where the output level is 900 million , the interest rate is 3% and the exchange rate is 200. The central
There is a country where the output level is 900 million , the interest rate is 3% and the exchange rate is 200. The central bank plans to release its monetary policy and increase the liquidity of the domestic currency. This increase in the liquidityis said to be maintained in the long run, so that money in circulation is not expected to get back to its current level. What is expected to happen with the output, the intrest rate and the exchange rate? Explain your answer!
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