assume that policymakers fail to stabilise the economy. This results in very high inflation and a steep decline in investor confidence, especially in financial markets. Use a suitable economic model to show what is likely to happen to capital flows and associated economic variables. Diagrams are needed to illustrate your answer.

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Q: Discuss the importance of studying Macroeconomics?

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A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: what is the purpose of the circular flow model?

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A: please find the answer below.

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