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The Danish krone is currently pegged to the euro. Using the IS-LM-FX model for Home (Denmark) and Foreign (Eurozone), illustrate how each of the following

The Danish krone is currently pegged to the euro. Using the IS-LM-FX model for Home (Denmark) and Foreign (Eurozone), illustrate how each of the following scenarios affect Denmark:

The Eurozone reduces its money supply.

aDenmark's economy will start expanding.

bDenmark's economy will not be affected.

c Denmark's economy will enter in a recession.

dDenmark's economy will start expanding in the short run and then will contract.

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