© 2007 Pearson Addison-Wesley. All rights reserved Chapter 18 Spending and the Exchange Rate in the Keynesian Model

18-2 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.1 Insulation Under Floating Exchange Rates

18-3 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.2 Dilemma: External Balance or Internal Balance?

18-4 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.3 Policy Combinations That Give External Balance

18-5 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.4 Policy Combinations That Give Internal Balance

18-6 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.5 The Swan Diagram of Internal and External Balance

18-7 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.6 Effect of a Fall in the Interest Rate, I

18-8 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.7 Monetary Expansion

18-9 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.8 Fiscal Expansion with Crowding- Out of Investment

18-10 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.9 Devaluation with Crowding- Out

18-11 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.A.1 Increase in the Exchange Rate with the Laursen- Metzler-Harberger Effect

18-12 Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Figure 18.A.2 External Disturbance under a Floating Exchange Rate