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I need help on the following model's as well as what the change is for all of the variables listed. For each of the following
I need help on the following model's as well as what the change is for all of the variables listed.
For each of the following situations, use the IS-LM-FX model to illustrate the effects of the shock. For each case, state and explain briefly the effect of the shock (increase, decrease, no change, or ambiguous) on the following variables:Y, i, E, C, I, TB.Assume the government allows the exchange rate to float.
a. Lump-sum taxes increase.
b. Exogenous increase in export demand.
c. Investors expect an appreciation of the home currency.
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