Intermediate Macroeconomics

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II. Short Answer Answers should be clear, concise, complete, and grammatical. If you draw a graph be sure it is clearly labeled. (15 points each) equilibrium achieved? III answering un quvows 3. The president of a small open economy proposes the following policies: increase government spending to build up the country's decaying infrastructure, cut taxes, impose tariffs on goods imported from abroad to reduce the trade deficit. Using the classical model of a small open economy determine the net effects of these policies on the exchange rate and the trade balance. Explain your results