How does the Swan diagram help us determine the policy mix to reach external and internal equilibrium
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How does the Swan diagram help us determine the policy mix to reach external and internal equilibrium simultaneously? Under what conditions does a single policy instrument help a nation reach both external and internal balance simultaneously?
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Exchange rate D P3 Surplus R₂ unemployment R₁ 0 N || Surplus inflation F H IV Deficit unemployment ||| Deficit inflation. D₁ D₂ D₂ Domestic expenditures or absorption EE D
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The Swan diagram is a useful tool for determining the policy mix to reach external and internal equilibrium simultaneously The diagram shows the relationship between domestic expenditures the real exc...View the full answer
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