Explain, using the IS-LM-BP model, the impact of the following shocks to an open economy. Border closures have led to a fall in tourism exports. You should assume perfect capital mobility and consider the impact for both fixed and flexible exchange rates.

Now, using the same model, explain the impact on the economy, if the Central Bank implements a policy of purchasing bonds on the open market. As in (a) above, assume perfect capital mobility and consider the cases of both fixed and flexible exchange rates.