Question: Explain how the balance-of-payments disequilibrium is corrected if monetary authorities do not change the domestic component of the nations monetary base: (a) In Problem 5b.

Explain how the balance-of-payments disequilibrium is corrected if monetary authorities do not change the domestic component of the nation’s monetary base:
(a) In Problem 5b.
(b) In Problem 5c.
(c) What happens if monetary authorities completely sterilize, or neutralize, the balance of payments disequilibrium with a change in the domestic component of the nation’s monetary base? How long can this go on?

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