Unformatted text preview: the reasons behind any shifts in equilibrium that are relevant. In your graphs, clearly label all curves and equilibria. Question 3 A certain country has an open economy, with completely free movement in capital and trade. It is currently at full employment, and allows its exchange rate to move freely. Using both an IS-LM-IP and an open economy AS-AD model, show the e±ect over both the short and medium run of an increase in government spending. 1...
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This note was uploaded on 05/23/2011 for the course ECON 203 taught by Professor Jules during the Spring '11 term at University of Cape Town.
- Spring '11