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Economic Policy Floating Exchange Rates. Daniels and VanHooseEconoic Policy2 The Effects of a Currency Depreciation on the IS and BP Schedules.

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Presentation on theme: "Economic Policy Floating Exchange Rates. Daniels and VanHooseEconoic Policy2 The Effects of a Currency Depreciation on the IS and BP Schedules."— Presentation transcript:

1 Economic Policy Floating Exchange Rates

2 Daniels and VanHooseEconoic Policy2 The Effects of a Currency Depreciation on the IS and BP Schedules

3 Daniels and VanHooseEconoic Policy3 The Effects of an Increase in the Money Stock with Floating Exchange Rates

4 Daniels and VanHooseEconoic Policy4 The Effects of an Increase in Government Spending with a Floating Exchange Rate

5 Daniels and VanHooseEconoic Policy5 Monetary and Fiscal Policies with Perfect Capital Mobility and Floating Exchange Rates

6 Daniels and VanHooseEconoic Policy6 Real-Income Effects with Perfect Capital Mobility and Fixed Versus Flexible Exchange Rates Exchange-Rate Setting Monetary Policy Effect Fiscal Policy Effect Fixed Exchange Rate Minimum EffectMaximum Effect Flexible Exchange Rate Maximum EffectMinimum Effect

7 Daniels and VanHooseEconoic Policy7 Cross-Country Effects In Two-Country Model With Perfect Capital Mobility Exchange-Rate Setting Monetary Policy Effect Fiscal Policy Effect Fixed Exchange Rate Locomotive Effect Beggar-Thy- Neighbor Effect Flexible Exchange Rate Beggar-Thy- Neighbor Effect Locomotive Effect

8 Daniels and VanHooseEconoic Policy8 Monetary and Fiscal Policies with Perfect Capital Mobility and Fixed Exchange Rates

9 Daniels and VanHooseEconoic Policy9 The Effects of an Increase in Government Spending with a Floating Exchange Rate

10 Daniels and VanHooseEconoic Policy10 The Effect of a Fall in the Demand for Real Money Balances on the Position of the LM Schedule


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