i need question 3 solution p;leaseeeee 3.In a system of fairly high (but imperfect) capital mobility and a fixedexchange rate within the Mundell-Fleming open economy macroeconomic(IS-LM-BP) model, an expansionary fiscal policy can result in either a surplusor a deficit in the balance of payments. Why is it so? Explain and illustrategraphically.4.Present graphically and explain the shape of a standard Keynesian aggregatesupply curve. Does the slope of a Keynesian aggregate supply curve varydepending on whether nominal (money) wage is variable (flexible) or fixed?Explain why and demonstrate graphically.Assume there is an exogenous drop in the price of imported oil. UsingKeynesian graphical model and analysis, explain how such a shock wouldaffect aggregate output and price level. Explain the role inflationaryexpectations play in this adjustment.5.

Fiscal policy:- The use of government spending and tax laws to impact economic conditions,…

3. In a system of fairly high (but imperfect) capital mobility and a fixed exchange rate within the Mundell-Fleming open economy macroeconomic (IS-LM-BP) model, an expansionary fiscal policy can result in either a surplus or a deficit in the balance of payments. Why is it so? Explain and illustrate graphically.

3. In a system of fairly high (but imperfect) capital mobility and a fixed exchange rate within the Mundell-Fleming open economy macroeconomic (IS-LM-BP) model, an expansionary fiscal policy can result in either a surplus or a deficit in the balance of payments. Why is it so? Explain and illustrate graphically.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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