Economic expansion throughout the rest of the world raises the world interest rate. Use the Mundell–Fleming model to illustrate
graphically the impact of an increase in the world interest rate on the exchange rate and level of output in a small open economy with a floating-exchange- rate system.
Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium levels; iv. the direction the curves shift; and v. the new short-run equilibrium.
Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium levels; iv. the direction the curves shift; and v. the new short-run equilibrium.
1 answer:
Answer: The answer is provided below
Explanation:
The fiscal expansion in the rest of the world will lead to an increase in the world interest rate and a decrease in the domestic investment.
As a result, a rise in the world interest rate will lead to an increase in the national income and also lower the nominal exchange rate.
The diagram has been attached.
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There were 72 (108 - 36) more maple trees in the woodlot before the bug problem. There were 108 maple trees in the woodlot before the bug problem. There are 36 maple trees in the woodlot after the bug problem.
The following information is given in the question:
Ratio of maple trees to oak trees before bug problem = 9:5
Ratio of maple trees to oak trees after replanting = 3:11
Total number of oak trees after replanting =132
Total number of trees in the woodlot is the same before and after the bug problem.
Let the number of maple trees after replanting be 'x'
From the data above, we can find the number of maple trees after replanting as follows:
So, number of maple trees after replanting in the woodlot are 36.
Let number of maple trees before bug problem be 'z'.
We can find the number of maple trees before bug problem as follows: