Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.

Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.

Like this presentation? Why not share!

- Intermediate Macroeconomics Mundell... by Stephen Kinsella 21986 views
- Mundell-Fleming (2) by Prof-Ariatna 1672 views
- Mundell-Fleming Presentation by Paul Kohlhaussen 1022 views
- Mundell fleming model by sammysammysammy 1092 views
- Fixed vs floating exchange rate system by Pankaj Newar 4283 views
- Open Economy Macroeconomics: The IS... by BPfanpage 3020 views

No Downloads

Total views

6,718

On SlideShare

0

From Embeds

0

Number of Embeds

10

Shares

0

Downloads

134

Comments

0

Likes

2

No embeds

No notes for slide

- 1. Fixed exchange rates: The BP curve IS-LM-BP analysis: fixed exchange rates
- 2. IS-LM-BP analysis: fixed exchange rates O r Y BP Zero Capital Flows r 1 SURPLUS DEFICIT
- 3. IS-LM-BP analysis: fixed exchange rates O r Y Restricted Capital Flows r 1 SURPLUS DEFICIT BP
- 4. IS-LM-BP analysis: fixed exchange rates O r Y BP Restricted Capital Flows SURPLUS DEFICIT Y 1
- 5. IS-LM-BP analysis: fixed exchange rates O r Y Unrestricted Capital Flows BP r 1 DEFICIT SURPLUS
- 6. IS-LM-BP analysis: fixed exchange rates O r Y BP r 1 Y 1 a
- 7. IS-LM-BP analysis: fixed exchange rates O r Y r 1 Y 1 a Assume that national income rises BP Y 2
- 8. IS-LM-BP analysis: fixed exchange rates O r Y r 1 Y 1 a Y 2 Assume that national income rises Deficit if rate of interest remains at r 1 BP b
- 9. IS-LM-BP analysis: fixed exchange rates O r Y r 1 Y 1 a Y 2 BP Rate of interest must rise to r 2 to restore balance of payments c r 2
- 10. Full equilibrium in the goods, money and foreign exchange markets IS-LM-BP analysis: fixed exchange rates
- 11. IS-LM-BP analysis: fixed exchange rates O r Y Full equilibrium in the goods, money and foreign exchange markets BP LM IS r 1 Y 1 a
- 12. Effect of an expansionary fiscal policy under fixed exchange rates IS-LM-BP analysis: fixed exchange rates
- 13. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 r 1 Y 1 An expansionary fiscal policy a IS 2 r 2 Y 2 b
- 14. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 a r 1 Y 1 An expansionary fiscal policy IS 2 r 2 b Y 2 Balance of payments surplus causes money supply to expand
- 15. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 a r 1 Y 1 An expansionary fiscal policy IS 2 r 2 b Y 2 Restoration of full equilibrium LM 2 r 3 Y 3 c
- 16. IS-LM-BP analysis: fixed exchange rates O r Y LM 1 IS 1 r 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve a BP IS 2
- 17. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 r 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve IS 2 a r 2 b Y 2
- 18. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 r 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve IS 2 a r 2 b Y 2 Balance of payments deficit causes money supply to contract
- 19. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS 1 r 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve IS 2 a r 2 b Y 2 Restoration of full equilibrium LM 2 r 3 Y 3 c
- 20. Effect of an expansionary monetary policy under fixed exchange rates IS-LM-BP analysis: fixed exchange rates
- 21. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS a r 1 Y 1 An expansionary monetary policy
- 22. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS a r 1 Y 1 An expansionary monetary policy LM 2 Y 2 r 2 b
- 23. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS a r 1 Y 1 An expansionary monetary policy Y 2 LM 2 r 2 b Balance of payments deficit causes money supply to contract again
- 24. IS-LM-BP analysis: fixed exchange rates O r Y BP LM 1 IS a r 1 Y 1 An expansionary monetary policy Y 2 LM 2 r 2 b Full equilibrium is restored back at point a
- 25. Floating exchange rates: The BP curve IS-LM-BP analysis: floating exchange rates
- 26. IS-LM-BP analysis: floating exchange rates O r Y SURPLUS BP
- 27. IS-LM-BP analysis: floating exchange rates O r Y BP SURPLUS Appreciation
- 28. IS-LM-BP analysis: floating exchange rates O r Y BP DEFICIT
- 29. IS-LM-BP analysis: floating exchange rates O r Y BP DEFICIT Depreciation
- 30. Effect of an expansionary fiscal policy under floating exchange rates IS-LM-BP analysis: floating exchange rates
- 31. IS-LM-BP analysis: floating exchange rates O r Y BP An expansionary fiscal policy LM IS 1 Y 1 IS 2 Y 2 r 1 r 2 b a
- 32. IS-LM-BP analysis: floating exchange rates O r Y BP LM IS 1 Y 1 An expansionary fiscal policy IS 2 a Y 2 r 1 r 2 b Balance of payments surplus causes the exchange rate to appreciate
- 33. IS-LM-BP analysis: floating exchange rates O r Y BP LM IS 1 Y 1 An expansionary fiscal policy IS 2 a Y 2 r 1 r 2 b The appreciation causes the IS curve to shift to the left
- 34. IS-LM-BP analysis: floating exchange rates O r Y BP 1 LM IS 1 Y 1 An expansionary fiscal policy IS 2 a Y 2 r 1 r 2 b Full equilibrium is restored at point c BP 2 IS 3 Y 3 r 3 c
- 35. IS-LM-BP analysis: floating exchange rates O r Y LM IS 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve a r 1 BP 1 IS 2 Y 2 r 2 b
- 36. IS-LM-BP analysis: floating exchange rates O r Y LM BP 1 IS 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve a Y 2 r 1 r 2 b IS 2 Balance of payments deficit causes exchange rate to depreciate
- 37. IS-LM-BP analysis: floating exchange rates O r Y LM BP 1 IS 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve a Y 2 r 1 r 2 b IS 2 Depreciation causes the IS curve to shift to the right
- 38. IS-LM-BP analysis: floating exchange rates O r Y LM BP 1 IS 1 Y 1 An expansionary fiscal policy: BP curve steeper than LM curve a Y 2 r 1 r 2 b IS 2 IS 3 BP 2 Y 3 r 3 c Full equilibrium is achieved at point c
- 39. Effect of an expansionary monetary policy under floating exchange rates IS-LM-BP analysis: floating exchange rates
- 40. IS-LM-BP analysis: floating exchange rates O r Y LM 1 IS 1 Y 1 An expansionary monetary policy a r 1 BP 1 Y 2 r 2 LM 2 b
- 41. IS-LM-BP analysis: floating exchange rates O r Y LM 1 IS 1 Y 1 An expansionary monetary policy a Y 2 r 1 r 2 b The balance of payments deficit causes the BP line to shift downward BP 1 LM 2
- 42. IS-LM-BP analysis: floating exchange rates O r Y LM 1 IS 1 Y 1 An expansionary monetary policy a Y 2 r 1 r 2 b BP 1 LM 2 The depreciation causes the IS curve to shift to the right
- 43. IS-LM-BP analysis: floating exchange rates O r Y LM 1 IS 1 Y 1 An expansionary monetary policy a Y 2 r 1 r 2 b BP 1 LM 2 BP 2 Full equilibrium is restored at point c IS 2 Y 3 r 3 c

No public clipboards found for this slide

×
### Save the most important slides with Clipping

Clipping is a handy way to collect and organize the most important slides from a presentation. You can keep your great finds in clipboards organized around topics.

Be the first to comment