Question: If you can't answer, please do not take this question (1) [22 points] Use the Mundell-Fleming (IS* - LM* ) model to answer the following

If you can't answer, please do not take this question

If you can't answer, please do not take this question (1)

(1) [22 points] Use the Mundell-Fleming (IS* - LM* ) model to answer the following question. Assume that this country is under the floating exchange rate system. Suppose that the price level relevant for money demand includes the price of imported goods. That is, the money demand function is given by P =L(r, Y), where P = APP + (1 - X)- PF The parameter 0

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