Fully explain the effects on (domestic) equilibrium output,
interest rates, and the exchange rate from an increase in the
foreign country’s money supply under fixed and flexible exchange
rates with mobile and immobile capital.(Include Graphs)
Fully explain the effects on equilibrium output, interest rates,
and the exchange rate from an increase in net exports under fixed
and flexible exchange rates with mobile and immobile capital.
(Include graphs)
Examine the effects of a decrease in foreign output and foreign
interest rate underflexible exchange rate regime when the goal of
the central bank is to achieve output stability (Hint: Use
Mundell-Fleming model) What happens to the components of
demand?
Examine the effects of a decrease in foreign output and foreign
interest rate under
flexible-exchange rate regime when the goal of the central bank
is to achieve output stability(Hint: Use Mundell-Fleming model)
.What happens to the components of demand?
Examine the effects of a decrease in foreign output and foreign
interest rate under flexible exchange rate regime when the goal of
the central bank is to achieve output stability (Hint: Use Mundell
- Fleming model). What happens to the components of demand?
draw the relevant graph
Q1)Examine the effects of a decrease in foreign output and foreign
interest rate underflexible-exchange rate regime when the goal of
the central bank is to achieve outputstability (Hint: Use
Mundell-Fleming model).What happens to the components
ofdemand?
Examine the effects of a decrease in foreign output and foreign
interest rate under
flexible
-
exchange rate regime when the goal of the central bank is to
achi
eve output
stability
(Hint: Use Mundell
-
Fleming model)
.
What happens to the components of
demand?
Examine the effects of a decrease in foreign output and foreign
interest rate under
flexible - exchange rate regime when the goal of the central
bank is to achieve output stability
(Hint: Use Mundell-Fleming model) What happens to the components
of demand?
Fully explain the effects of an increase in the expected future
exchange rate on the spot exchange rate under both fixed and
flexible exchange rate regimes (include the effects on the BOP, FX
market, and domestic and foreign returns).
Under flexible exchange rates, an expansionary monetary policy
leads to a decrease in the interest rate, and thus a depreciation
of the exchange rate.’ Explain and critically evaluate this
statement using IS-LM-IP and IS-MP-IP models.