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With the aid of the monetary model of exchange rate determination, and assuming priceflexibility in the economy, analyse the impact of the Central Bank's acco-

With the aid of the monetary model of exchange rate determination, and assuming

priceflexibility in the economy, analyse the impact of the Central Bank's acco-

modating monetary policy on the balance of payments accounts, holding all other

variables constant. [ 20 Marks]

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