Country A has a fixed exchange rate with country B. Due to a recession in country B, demand for A's goods falls. Draw what would happen on the graph below. On the graphs, draw what country A's central bank must do to keep the fixed exchange rate. Answer the following:

What will happen to A's output?

What will happen to the price level in country A?

Posted Date: 3/13/2013 6:39:41 AM | Location : United States

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