Suppose that a small open economy starts at a long-run equilibrium (A). Now assume that Government Spending (G) increases in our country.

Use the Mundell-Fleming model with Flexible Exchange-Rate regime to illustrate graphically the impact of this increase in Government Spending in the short run. Be sure to start your analysis from the Keynesian Cross and/or the Market for Money, and to label the axes, the curves, the initial equilibrium values, the direction the curves shift and when they do shift, and the short-run equilibrium values (you can label your final equilibrium D, for Done).