Problem
1. Under what circumstances will a domestic fiscal policy expansion be successful in increasing GDP if a fixed exchange rate is maintained? When will it be unsuccessful? Illustrate with the IS/LM/BP graph.
2. What is the effect on Country A's macro economy of the adoption of an expansionary monetary policy by the rest of the world in a world of fixed exchange rates?
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.