(Solution) - For each of the following situations use the IS LM FX model -(2025 Original AI-Free Solution)

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For each of the following situations, use the IS-LM-FX model to illustrate the effects of the shock. For each case, state the effect of the shock on the following variables (increase, decrease, no change, or ambiguous): Y, i, E, C, I, and TB. Assume the government allows the exchange rate to float and makes no policy response.
See the following figures.
a. Foreign output decreases.
b. Investors expect a depreciation of the Home currency.
c. The money supply increases.
d. Government spending increases.