Using an IS-LM-FE diagram as an aid, describe the effect on a small open economy of a permanent increase in the full-employment level of output. Assume flexible exchange rates and assume that the domestic interest rate does not deviate from the foreign interest rate. In the short run, when the price level is foxed, domestic output net exports the nominal exchange rate and the real exchange rate
Using an IS-LM-FE diagram as an aid, describe the effect on a small open economy of a permanent increase in the full-employment level of output. Assume flexible exchange rates and assume that the domestic interest rate does not deviate from the foreign interest rate. In the short run, when the price level is foxed, domestic output net exports the nominal exchange rate and the real exchange rate
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:Using an IS-LM-FE diagram as an aid, describe the effect on a small open economy of a permanent increase in the full-employment level of output. Assume flexible
exchange rates and assume that the domestic interest rate does not deviate from the foreign interest rate.
In the short run, when the price level is foxed, domestic output
net exports
v the nominal exchange rate
and the
real exchange rate
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