In early 1994, Mexico was adhering to a fixed-exchange-rate
system. Use the Mundell–Fleming model to illustrate graphically the
short-run impact on the exchange rate and level of output of
increased country risk caused by the Chiapas uprising and the
assassination of presidential candidate Colosio. Be sure to
iii.the initial equilibrium levels;
iv.the direction the curves shift; and
v.the new short-run equilibrium.