Monetary model of exchange rate determination

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With the aid of the monetary model of exchange rate determination, and assuming price fexibility in the economy, analyse the impact of the Reserve Bank's accomodating monetary policy on the balance of payments accounts, holding all other variables constant.

Can someone draw the graph as well because it very confusing if the graph is the IS-LM with interest rate on the vertical and output on the horizontal or are we including the aggregate demand?

Reference no: EM132550398

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