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Suppose a country’s output is below / above the policy-maker’s desired level of output and is experiencing a trade deficit / surplus. Assume the policy-maker’s goals are to achieve the desired level of output (i.e., full employment output) and balanced trade. Given this information, what type of exchange rate and / or fiscal policy can be used to achieve simultaneously these two goals? Explain taking a country’s data into consideration. The following should be included in your discussion. 1. Identifying economic performance using GDP growth and trade balance. 2. Relevant policy advocates-discussion of fiscal and exchange rate policies. 3. A table with at least GDP, trade balance, budget deficit and nominal or real change rate. Your data cover period 1990 to 2018. Your discussion can be centered on recent years.
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