Problem
Using the IS-LM-FX model, illustrate how each of the following scenarios affects the home country. Compare the outcomes when the home country has a fixed exchange rate with the outcomes when the home currency floats.
a. The foreign country increases the money supply.
b. The home country cuts taxes.
c. Investors expect a future appreciation in the home currency.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.