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Using the IS/LM/BP Framework, Explain How Two of the Following

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Essay

Using the IS/LM/BP framework, explain how two of the following shocks impact on the domestic economy under flexible exchange rates and under fixed exchange rates.
(a) an increase in the foreign rate of interest
(b) a decrease in foreign income
(c) a decrease in foreign prices

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Definitions:

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The process of checking and ensuring that a product, service, or system meets specified standards or requirements.

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Communications conveyed within or outside a business, typically involving information related to operations, services, or products.

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Written records that are essential for the operation and management of a business, including reports, memos, contracts, and policies.

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