provide answers to all subquestions please Consider an open economy of the form: YC(y)=I(r)+G+X(e)V(Y,e)PM=L(Y,r)V(Y,e)X(e)=F(r) Where, Investment (I) depends negatively on interest rate (r), Consumption (C) depends positively on income (Y); Exports (X) depend positively on exchange rate; Imports (V) depend positively on income (Y) and negatively on exchange rate (e); Money demand depends positively on income and negatively on interest rate and net capital inflow of capital depends positively on interest rate. (a) Within the context of this model with fixed domestic prices and flexible exchange rates, detirmine and provide economic intuition for the signs and magnitudes of the following multipliers if the BP curve has the usual slope: i) dY/dG ii) de/dG iii) dY/dM iv) de/DM (b) Show and explain why expansionary fiscal policy under complete capital mobility reduces the fiscal policy multiplier to its minimum level. (c) Determine and explain the size of the fiscal policy multiplier when income elasticity of demand for money approaches zero..

1. provide answers to all subquestions please Consider an open economy of the form:
YC(y)=I(r)+G+X(e)V(Y,e)PM=L(Y,r)V(Y,e)X(e)=F(r) Where, Investment (I) depends
negatively on interest rate (r), Consumption (C) depends positively on income (Y); Exports (X)
depend positively on exchange rate; Imports (V) depend positively on income (Y) and negatively
on exchange rate (e); Money demand depends positively on income and negatively on interest
rate and net capital inflow of capital depends positively on interest rate. (a) Within the context of
this model with fixed domestic prices and flexible exchange rates, detirmine and provide
economic intuition for the signs and magnitudes of the following multipliers if the BP curve has
the usual slope: i) dY/dG ii) de/dG iii) dY/dM iv) de/DM (b) Show and explain why
expansionary fiscal policy under complete capital mobility reduces the fiscal policy multiplier to
its minimum level. (c) Determine and explain the size of the fiscal policy multiplier when
income elasticity of demand for money approaches zero.