1. CHAPTER 18 Economic Shocks to Nations with Flexible Exchange Rates
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2. Exhibit 18-1 Analysis Methodology: Three Analytical Steps
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South-Western/Cengage Learning. All rights reserved

3. Exhibit 18-2 Real Goods Market: Economic Setting
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4. Exhibit 18-3 Real Loanable Funds Market: Economic Setting
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5. Exhibit 18-4 Foreign Exchange Market: Economic Setting
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6. Exhibit 18-5 Effect of Increased Government Borrowing on the Real Loanable Funds Market
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7. Exhibit 18-6 Effects of a Net Increase in Aggregate Demand on the GDP Price Index and Real GDP
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8. Exhibit 18-7 Primary and Secondary Effects
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9. Exhibit 18-8 Macroeconomic Variables That Influence CTX, NIX, and RAX
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10. Exhibit 18-9 Effects of Rising Real GDP on the Peso’s Value
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11. Exhibit 18-10 Effects of Rising Mexican Prices on the Peso’s Value
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12. Exhibit 18-11 Effects of a Rising Real Risk-free Mexican Interest Rate on Peso’s Value
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13. Exhibit 18-12 Summary of Changes in the Value of the Peso
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14. Exhibit 18-13 High-Mobility and Low-Mobility International Capital Markets
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15. Exhibit Changes in Mexico’s Balance of Payments Assuming High-Mobility International Capital Markets
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16. Exhibit Changes in Mexico’s Balance of Payments Assuming Low-Mobility International Capital Markets
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17. Exhibit Real Income and Price Effects Overpower the Nominal Exchange Rate Effects in the Current Account
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18. Exhibit An Overview of Expansionary Fiscal Policy with Flexible Exchange Rates and High-Mobility International Capital Markets
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19. Exhibit An Overview of Expansionary Fiscal Policy with Flexible Exchange Rates and Low-Mobility International Capital Markets
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20. Exhibit 18-19 Effect of an Increase in Real Money Supply on the Real Loanable Funds Market
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21. Exhibit 18-20 Progress Report on the Three –Sector Model
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22. Exhibit 18-21 The Effects of an Increase in Aggregate Demand
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23. Exhibit 18-22 Progress Report on the Three-Sector Model
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24. Exhibit 18-23 Effects of Rising Mexican Real GDP on the Peso Value
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25. Exhibit 18-24 Effects of Rising Mexican Price on the Peso’s Value
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26. Exhibit 18-25 Effects of a Falling Real Risk-Free Rate on the Peso’s Value
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27. Exhibit 18-26 Summary of Changes in the Value of the Peso
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28. Exhibit 18-27 Progress Report on the Three-Sector Model
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29. Exhibit 18-28 Changes in Mexico’s Balance of Payments
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30. Exhibit 18-29 Interdependence of the Markets in the Three-Sector Model
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31. Exhibit Initial Economic Shock, First-Round Effects, and Second-Round of Effects from Expansionary Fiscal Policy
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32. Exhibit Initial Economic Shock, First-Round Effects, and Second-Round of Effects from Expansionary Monetary Policy
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33. Exhibit 18-32 Unstable Economic Feedback Effects
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34. Exhibit 18-33 Stable Feedback Effects: Four Scenarios
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