with the aid of the IS-LM diagram, show the effects of a foreign monetary contraction on foreign output and foreign interest rate
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Solution 1
In an open economy with fixed exchange rates, the effects of a foreign monetary contraction can be illustrated using the IS-LM model. A monetary contraction is a decrease in the money supply, which can be achieved by central bank actions such as increasing the reserve requirements for banks or selli Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
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