assumptions show what happens to interest rates, output and the exchange rate in the US. To do so, use the following diagrams all pertaining to the US: Keynesian cross on the top left, the IS LM diagram on the bottom left and the FX market on the bottom right. Label the initial point as point A and point B as the new equilibrium after the monetary expansion in Japan. As is customary, label the initial output (Y), interest rate (i), and nominal exchange rate (E) with a subscript l, and the corresponding values after the monetary expansion in Japan with a subscript 2. Note again that we are modeling US economic variables, not those for Japan. b} (it) points} Discuss the factors influencing the trade balance for the US. There are three to discuss (ignore any J curve effects). c) (15 points 5 for each correct and completely labeled diagram] Use the identical diagrams as you did for part a} but this time, instead of Japan increasing output via expansionary monetary policy, they