Answer Happy

Use the Mundell-Fleming Model (IS*-LM* Model)
to graphically illustrate the effects to the economy to each of the
following shocks. For each shock graphically illustrate the effects
under both a floating and fixed exchange rate system. [i.e. Each
part will have two (2) graphs showing each exchange rate
system].
a. Decrease in import tariff (tax on imports) or increase in
import quota.
- Floating exchange rate system
- Fixed exchange rate system

b. Expansionary fiscal policy
- Floating exchange rate system
- Fixed exchange rate system

c. Increase in interest rate.
- Floating exchange rate system
- Fixed exchange rate system