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Balance of Payments I: Output,
Exchange Rates, and Macroeconomic
Policies in the Short Run
1. In 2001, President George W. Bush and Federal Reserve Chairman Alan Greenspan
were both concerned about a sluggish U.S. economy. They also were concerned about
the large U.S. current account deficit. To help stimulate the economy, President Bush
proposed a tax cut, whereas the Fed had been increasing U.S. money supply. Compare
the effects of these two p
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