Question

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)

290

likes
1448 views

Answer to a math question 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)

Expert avatar
Andrea
4.5
82 Answers
Impact on interest rate graphically represented with full capital mobility and implementation of expansionary policy.

[Step-by-Step]

Exercise No. 1:

1. Initial exchange rate: 1500 \, \text{diner/}\$.
2. Current exchange rate: 800 \, \text{diner/}\$.

Graph IS/LM and money market:

\text{Interest rate (r)} \to \text{Y-axis}
\text{Income (Y)} \to \text{X-axis}

Given the fixed exchange rate:

1. Due to deviation from the fixed exchange rate, the monetary authority must intervene by decreasing the money supply.
2. Money supply affects LM curve.
3. Graph IS/LM representing decreased money supply shifts LM leftward.

Answer: Graph showing changed interest rates with LM curve shift.

Exercise No. 2:

1. Expansionary fiscal policy stimulates aggregate demand shifting IS curve rightward.
2. In open economies with full capital mobility and fixed exchange rates:
- Increased income raises demand for money.
- Central bank intervenes to maintain exchange rate by increasing money supply.
3. LM curve shifts rightward accommodating the shift in IS.

Graph IS/LM representing these interactions:

\text{Graph Explanation:}
- Axis same as IS/LM graph (Interest rate on Y, Income on X).

Answer: Graph with both IS and LM shifts accommodating new fiscal policy.

Frequently asked questions (FAQs)
What is the dot product of vectors u = (3, -2) and v = (1, 4)?
+
Math Question: "If log₃ (x) = 2, what is the value of x?"
+
What is the condition for two triangles to be equal, considering congruent corresponding sides and angles?
+
New questions in Mathematics
calculate the derivative by the limit definition: f(x) = 6x^3 + 2
8x-(5-x)
58+861-87
*Question!!* *Victory saved 3,000 in first bank and 2,000 Naira in union bank PSC with interest rate of X% and Y% per annual respectively his total interest in one year is #640. If she has saved 2,000 naira with first bank and 3,000 naira in union bank for same period she would have made extra 20# as additional interest, then find the value of X and Y
132133333-33
how many arrangement can be made of 4 letters chosen from the 8 letters of the world ABBSOLUTE
Desarrolla (2x)(3y + 2x)5
A merchant can sell 20 electric shavers a day at a price of 25 each, but he can sell 30 if he sets a price of 20 for each electric shaver. Determine the demand equation, assuming it is linear. Consider (P= price, X= quantity demanded)
12(3+7)-5
Solve the equation: sin(2x) = 0.35 Where 0° ≤ x ≤ 360°. Give your answers to 1 d.p.
Solve equations by equalization method X-8=-2y 2x+y=7
Sabendo+que+o+tri%C3%A2ngulo+ABC+%C3%A9+ret%C3%A2ngulo+e+que+um+de+seus+%C3%A2ngulos+mede+30+quanto+mede+o+terceiro+ tri%C3%A2ngulo
A hardware bill totals $857.63 with discounts of 5% and 3%. What is the net cost of the Material ?
In a 24 hours period, the average number of boats arriving at a port is 10. Assuming that boats arrive at a random rate that is the same for all subintervals of equal length (i.e. the probability of a boat arriving during a 1 hour period the same for every 1 hour period no matter what). Calculate the probability that more than 1 boat will arrive during a 1 hour period. (P(X>1) ) Give your answers to 4 decimal places and in a range between 0 and 1
Find the zero of the linear function 8x + 24 = 0
A post office has three categories of letters: 60% are from businesses, 30% are individual mail, and the remaining 10% are government mail. 5% of the letters from businesses have address errors, 10% of the individual mail has address errors, while 1% of the government mail has address errors. If we receive a letter with an address error, what is the probability that it is individual mail?"
The average weekly earnings in the leisure and hospitality industry group for a re‐ cent year was $273. A random sample of 40 workers showed weekly average ear‐ nings of $285 with the population standard deviation equal to 58. At the 0.05 level of significance can it be concluded that the mean differs from $273? Find a 95% con‐ fidence interval for the weekly earnings and show that it supports the results of the hypothesis test.
The slope of the tangent line to the curve f(x)=4tan x at the point (π/4,4)
draw the condensed formula fpr 3,3,4 triethylnonane
Sin(5pi/3)