Question: Consider the following statement: the fact that China's large current account surpluses have occurred when the domestic economy has also been booming means that China
Consider the following statement: "the fact that China's large current account surpluses have occurred when the domestic economy has also been booming means that China is in a 'nondilemma' situation, where exchange rate appreciation moves the economy simultaneously closer both to both external and to internal balance." Use an appropriate diagram to illustrate this statement and explain the logic that is illustrated by your diagram.
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