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in a large open econonmy with; c=50+0.75(Y-T) I=200-20r NX=200-50E M/P=Y-40r G=200 T=200 M=3000 P=3 financial capital flow equation, CF=150-10r. a)Derive and graph the IS* and

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in a large open econonmy with; c=50+0.75(Y-T) I=200-20r NX=200-50E M/P=Y-40r G=200 T=200 M=3000 P=3 financial capital flow equation, CF=150-10r. a)Derive and graph the IS* and LM*curves. b)Calculate the equilibrium exchange rate, income, and net exports. c)Assume a floating exchange rate. Calculate what happens to the exchange rate, income, net exports, and the money supply if the government increases its spending by 50. Use a graph to show your findings.

image text in transcribed
in a large open econonmy with; c = 50 + 0.75(Y - T) I = 200 - 20r NX = 200 - 50E M/P = Y -40r G = 200 T = 200 M = 3000 P = 3 financial capital flow equation, CF = 150 - 10r. a) Derive and graph the IS* and LM*curves. b) Calculate the equilibrium exchange rate, income, and net exports. ()Assume a floating exchange rate. Calculate what happens to the exchange rate, income, net exports, and the money supply if the government increases its spending by 50. Use a graph to show your findings

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