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Assume the economy is presently in recession, and the exchange rate if fixed using the IS-LM model.
a) Describe and show the economy adjustment ( in the medium run) b) Describe and show the economy adjustment (in the medium run) without devaluation
Consumer expenditure on durable goods such as cars & furniture, as well aspurchases of new houses, fall much more than expenditure on non-durable goodsand services during recession
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