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What is Exchange Rate Determination in IS-LM Model about?

The document discusses the determination of exchange rates (ERs) according to an international economics model based on IS-LM curves with the addition of a balance of payments equation. It introduces the key components of the model, including the goods market, money market, and balance of payments. It also provides context on interest rates and defines the endogenous variables in the model as output, the interest rate, and the exchange rate. The document serves to lay the theoretical groundwork for using th

Author

Academic Consultancy

Language

EN