Question
This is a typical small open economy with floating. i.e. e = 2.25 + 0.25r. s Compare the exchange rates under scenarios under a, b
This is a typical small open economy with floating. i.e. e = 2.25 + 0.25r. s Compare the exchange rates under scenarios under a, b ( expansionary fiscal policy) and scenario e ( tight money policy).
Explain why the exchange rates are different under each scenario. Use IS* and LM* to support your answer.
Compare the net export under scenarios a, b and e.
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Financial Statement Analysis
Authors: Martin S. Fridson, Fernando Alvarez
5th Edition
1119457149, 978-1119457145
