1. For IS=r=10-.8Y and LM=r=2+.4Y, if the world interest rate is 6.00 % what is the exchange rate between the domestic currency and the international standard currency if the equation is E=1-.06 NCO. [HINT: Calculate the Net Capital Outflow first] a) .5 b) .6 c) .7 d) .8 e) .9

1. For IS=r=10-.8Y and LM=r=2+.4Y, if the world interest rate is 6.00 % what is the exchange rate between the domestic currency and the international standard currency if the equation is E=1-.06 NCO. [HINT: Calculate the Net Capital Outflow first] a) .5 b) .6 c) .7 d) .8 e) .9

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

use graph if possible

1. For IS=r=10-.8Y and LM=r%3D2+.4Y, if the world interest rate is 6.00
% what is the exchange rate between the domestic currency and
the international standard currency if the equation is E=1-.06
NCO.
[HINT: Calculate the Net Capital Outflow first]
a) .5
b) .6
c) .7
d) .8
e) .9

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