Consider the IS-LM-BP model of a small open economy with the relevant behavioral function as follows: C = 50 + 0.75-(Y-T). I=200-20-r, G=200 T=200, NX=200-50e, MIP=Y-40r, M=3000, P=3, r*=5. Among them, C is private consumption, Y is output, T is tax, r is interest rate, G is government consumption, I is investment, NX is net export, e is exchange rate, M is money supply, P is price, r* Cars for the world. Please answer the following questions: 1) Calculate the exchange rate, output and net exports under the overall equilibrium. 2) Please draw a graph and calculate under the floating exchange rate system, when the government expenditure increases by 50, the equilibrium output, the weight rate, what is the money supply and net exports? 3) Please draw a graph and calculate how much the equilibrium output, exchange rate, money supply and net exports will be when government spending increases by 50 under a fixed exchange rate system?
Consider the IS-LM-BP model of a small open economy with the relevant behavioral function as follows:
C = 50 + 0.75-(Y-T).
I=200-20-r,
G=200
T=200,
NX=200-50e,
MIP=Y-40r,
M=3000,
P=3,
r*=5.
Among them, C is private consumption, Y is output, T is tax, r is interest rate, G is government consumption, I is investment, NX is net export, e is exchange rate, M is money supply, P is price, r* Cars for the world.
Please answer the following questions:
1) Calculate the exchange rate, output and net exports under the overall equilibrium.
2) Please draw a graph and calculate under the floating exchange rate system, when the government expenditure increases by 50, the equilibrium output, the weight rate, what is the money supply and net exports?
3) Please draw a graph and calculate how much the equilibrium output, exchange rate, money supply and net exports will be when government spending increases by 50 under a fixed exchange rate system?
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