A small open economy can be described by the following:

C = 3000 + 0.75(Y - T) P = 1.20

I = 6000 - 2000r NX = 7750 - 200e

G = 6000 MD = ( 0.25Y - 2500r )

r(world) = 0.25

e = Nominal exchange rate (in # of FC units per DC unit)

The government budget is balanced.

NOTE: Keep your answers to 2 decimals. When you are asked for numerical answers, DO NOT enter any unit of measurement, or comma, or cite the variable again.

Part A)

Suppose the country has a flexible exchange rate regime and the nominal money supply is equal to 20070. In the initial short-run equilibrium, "consumption is equal to , net exports is equal to , real output is equal to , and the nominal exchange rate is equal to "

Part B)

Now suppose the country adopts a fixed exchange rate regime and fixes the nominal exchange rate at 0.90. In the new short-run equilibrium, "consumption is equal to , net exports is equal to , real output is equal to , and the nominal money supply is equal to "