Problem
1. What will happen under flexible rates if the intersection of the IS and LM curves is below (or to the right) of the BP curve? Why?
2. What exogenous real and financial factors influence the position of the BP curve?
3. Under what capital mobility conditions is fiscal policy totally ineffective in influencing income? Explain why this result occurs.
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.