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You are the central banker for an economy with a fixed

Assignment

You are the Central Banker for an economy with a fixed exchange rate regime. New data arrives indicating that the economy has experienced a negative productivity shock. Discuss how quickly you would respond, if (and how) you would coordinate with the government, and any concerns you have on the impact to the economy and the effectiveness of your policy choices. How does your response differ from that of a Central Banker for an economy with a floating exchange rate?

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