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14. [Open Economy] Consider an open economy with trade under fixed exchange rate (See the following equations). 以下のような価格変動がない固定相場制における国際マクロモデルを考えよう. Consumption Function ** Investment Government expenditure XB Import Function Export 輸出 Money demand function == Real money supply 実質マネーサプライ C = 30 +0.8Y I = 30 - 4r G=0 IM = 10 +0.2Y EX = 80 L = 2Y+(200 - 20r) M/P = 700 (a) Calculate the value of the foreign trade multiplier and compare it with that of the multiplier without trade. (b) Derive the IS curve and the LM curve and draw the graph. (c) Derive GDP and interest rate at the equilibrium.
(d) Calculate the trade balance. What is the amount of GDP which satisfies the trade balance condition? (e) Assume that the interest rate derived in (c) is equal to that in the world (rw). Draw the graph of IS and LM curves when a fiscal policy is introduced. (f) Derive the necessary amount of G in order to satisfy the zero trade balance. (g) Draw the graph of IS and LM curves when a monetary policy is introduced. Explain the effect of a monetary policy on GDP under fixed exchange rate.