Assume an open economy described by the following equations: IS: Y = c(1 t)Y +Ī- bi + G + x₁YW + x₂Rm₁Y+ m₂R M h LM: Y = ^ +ội k k FE: i = iw If this country is keeping a regime of flexible exchange rates, which exogenous variables have a positive output multiplier?
Assume an open economy described by the following equations: IS: Y = c(1 t)Y +Ī- bi + G + x₁YW + x₂Rm₁Y+ m₂R M h LM: Y = ^ +ội k k FE: i = iw If this country is keeping a regime of flexible exchange rates, which exogenous variables have a positive output multiplier?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![Assume an open economy described by the following equations:
IS: Y = c(1 t)Y +Ī− bi + G + x₁YW + x₂R =m₁Y+ m₂R
M
LM: Y = +i
k k
FE: i = iw
If this country is keeping a regime of flexible exchange rates, which exogenous variables
have a positive output multiplier?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F66b95423-d30f-49fb-a760-466e355505ce%2F264e77c7-84e5-42ba-b61a-a46d2a56a81c%2Fs02t6g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume an open economy described by the following equations:
IS: Y = c(1 t)Y +Ī− bi + G + x₁YW + x₂R =m₁Y+ m₂R
M
LM: Y = +i
k k
FE: i = iw
If this country is keeping a regime of flexible exchange rates, which exogenous variables
have a positive output multiplier?
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