1.2. Activities Exercise No. 1 (60 points) Suppose an economy for which we know that there is a fixed exchange rate of 1500 diner/$. Explain and graph (IS/LM and money market) what effect it would have on the interest rate if the current exchange rate is 800 diner/$. Indicators / Levels of achievement Achieved Moderately achieved Not achieved Explanation Explain correctly Considering the relationship cause effect the model IS/LM and market monetary Taking into account the cause effect relationship (30 points) Explain correctly Considering the relationship the IS/LM model causes an effect Taking into account the cause effect relationship (15 points) Does not explain correctly and does not take into account the cause effect relationship (0 points) Chart Changes are identified produced in IS/LM and money market. (30 points) Change is identified produced in IS/LM. (15 points) No change is identified produced in IS/LM neither in market exchange rate. (0 points) Exercise No. 2 (40 points) Draw a graph and explain what effect the implementation of an expansionary fiscal policy had in an open economy with full capital mobility and a fixed exchange rate. Indicators / Levels of achievement Achieved Moderately achieved Not achieved Explanation Explain correctly Considering the relationship cause effect (10 points) Correctly explains that there are 2 errors in the cause-effect relationship. (5 points) Does not explain correctly and does not take into account the cause effect relationship (0 points) Chart Changes are identified produced in IS/LM incorporating all the model variables Considering the relationship cause effect (30 points) The change is identified produced IS or LM considers the cause-effect relationship (15 points) NO identify the changes produced in IS/LM incorporating all the model variables Considering the relationship cause effect (0 points)
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