Question: 4. Using the IS-LM framework, discuss the effects of an increase in government spending by a country on its output, interest rate, exchange rate, and

4. Using the IS-LM framework, discuss the effects of an increase in government spending by a country on its output, interest rate, exchange rate, and trade balance (a) under a flexible exchange rate system, and (b) under a fixed exchange rate system. (8 points)

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