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US and trade exclusively with the US. Suppose further that govenment of coutry A arbitrarily a law doubling all domestic incomes in A and doubling the price of all dosmetically produced goods and services.A. Assume FIXED excahgne rates. what happens to the IS curve in A why?B. What does the central bank in A have to do to maintain the exchange rate? why?C. What is the final result of this bank action?
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