Suppose again that investment rises in Boversia. In this case, assume that higher confidence in the economy

Question:

Suppose again that investment rises in Boversia. In this case, assume that higher confidence in the economy also causes a decrease in net capital outflows. Use graphs to answer the following questions:
a. If the central bank holds the real interest rate constant, what happens to output and the real If the central bank wants to keep output constant, should it raise or lower the interest rate?
c. If the central bank wants to keep the constant, should it raise or lower the interest rate? Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...