With perfectly immobile capital, Capital account balance is not in the picture so BOP=CAB + KAB becomes BOP= CAB. CAB= current account balance.
The graph is depicted as the BOP line being vertical. Q is on the x axis, i is on the y axis. BOP>0 to the left of the line and BOP<0 to the right of the line.
When foreign income increases, this line BOP shifts to the right. I do not understand why because with an increased foreign income, the number of exports rise. This is consistent with BOP surplus. Why is the BOP shifting right in this case into a deficit? Is it because there is no interest rate to offset the exports in this case?