*11. Starting from point E in Figure 18.8, draw a figure showing how the nation could reach internal and external balance with flexible exchange rates by using an expansionary fiscal rather than an easy monetary policy if capital mobility is large and the BP curve is to the right of point Z in Figure 18.8. BP LM - 7.0 Z BP' 1 LM" E 5.0 4.5 LM --IN 71 C U 7 2.5 1 IS IS 0 Yg=1000 Ye=1400 Ye=1500 FIGURE 18.8. The IS-LM-BP Model with Flexible Exchange Rates. Start *11. Starting from point E in Figure 18.8, draw a figure showing how the nation could reach internal and external balance with flexible exchange rates by using an expansionary fiscal rather than an easy monetary policy if capital mobility is large and the BP curve is to the right of point Z in Figure 18.8. BP LM - 7.0 Z BP' 1 LM" E 5.0 4.5 LM --IN 71 C U 7 2.5 1 IS IS 0 Yg=1000 Ye=1400 Ye=1500 FIGURE 18.8. The IS-LM-BP Model with Flexible Exchange Rates. Start