Business, 16.12.2019 18:31, jesh0975556

Assume that the lm curve for a small open economy with a floating exchange rate is given by y=200r-200+2(m/p),while the is curve is y=400+3g-2t+3nx-200r. the function for nx is nx=200-100e, where e is the exchange rate. the price level(p) is fixed at 1.0. the international interest rate is r=2.5 percent.

a. using the lm curve, find the equilibrium level of y in the small open economy, if m:

b. given this value of y, if g=100 and t=100, what must be the equilibrium value of

c. if this value of nx is to be achieved, what must be the equilibrium exchange rate, e?

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Assume that the lm curve for a small open economy with a floating exchange rate is given by y=200r-2...