For each of the following situations use the is-lm-fx model, Ask an Expert

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For each of the following situations, use the IS-LM-FX model we learned in class to graphically illustrate the effects of the shock. State the effect of the shock on the following variables: Y, i, E, C, I, TB for each case below. Assume that the government lets the exchange rate float.

a. The money supply increases.

b. Government spending increases.

c. Foreign income decreases.

d. Investors expect a depreciation of the home currency.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M965302

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