Suppose the Central Bank of a country that follows a fixed exchange rate regime would like to lower interest rates to st

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answerhappygod
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Suppose the Central Bank of a country that follows a fixed exchange rate regime would like to lower interest rates to st

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Suppose the Central Bank of a country that follows a fixed
exchange rate regime would like to lower interest rates to
stimulate economic growth. Explain how the Central Bank can achieve
this policy goal, while holding the exchange rate fixed, under
imperfect asset substitutability. Support your explanation with
graphs and/or equations as appropriate.
Please answer within 1 hour.
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