Illustrate graphically the effects in the foreign exchange market of an expansionary monetary policy carried out by

Question:

Illustrate graphically the effects in the of an expansionary monetary policy carried out by the foreign country in our two-country framework. Consider the cases of both a fixed and a flexible exchange rate?
Foreign Exchange Market
The foreign exchange market (also known as forex, FX or the currency market) is an over-the-counter (OTC) global marketplace that determines the exchange rate for currencies around the world. Participants are able to buy, sell, exchange and...