On 24 March 2022 the South African Reserve Bank (SARB) increased the repurchase rate (repo rate) for a third successive time by 25 basis points to 4.25%.

Use the open economy IS-LM-FE model to analyse this change in the repo rate on the domestic economy (i.e., South Africa), firstly assuming that South Africa uses a flexible exchange rate regime and then assuming that South Africa was to adopt a fixed exchange rate (Note: fully labelled diagrams must form part of your discussion).