Our macroeconomic model assumes that GDP is constant. However, the model could be used to analyze the effects of a one-time increase in GDP. What does the model predict about the real interest rate, net capital outflow, net exports, and the real exchange rate when GDP increases?

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The Answer of Our macroeconomic model assumes that GDP is constant. However, the model could be used to analyze the effects of a one-time increase in GDP. What does the model predict about the real interest rate, net capital outflow, net exports, and the real exchange rate when GDP increases?

Our Macroeconomic Model Assumes That GDP Is Constant