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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?
CAPITAL ACCOUNT This records all transactions arising from capital movements into and out of the country. There are a variety of such capital flows recorded, namely: i.
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Where does the firm Operate? The firm will avoid stages I, II and III and will instead choose stage II. It will avoid stage I because this shall involve using the fixed facto
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In the long run, because of the assumption of free entry and exit of the firms, it's not possible for the firms to make super-normal profits nor it is possible for them to incur lo
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