<p>Can you suggest where is the world interest rate in the economy which has a positive current account and a financial account surplus, fixed exchange rate and relative capital immobility? The graph of this should look like this: <a href="https://i.sstatic.net/ldY9E.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/ldY9E.png" alt="pic"></a>
Since NX and FA are positive, BP line is righter than the intersection of IS and LM curves, so <span class="math-container">$i_0$</span> is the country's interest rate, but what is the world's one?</p>

CC BY-SA 4.0
2020-04-19T07:21:38.763Z
What is the BP line?
Brennan
CC BY-SA 4.0
2020-04-19T07:26:41.863Z
BP = BOP (Balance of payment) = NX + FA
student
<macroeconomics><interest-rate><exchange-rates><open-economy-macro><balance-of-trade>
How to define world interest rate using IS-LM-BP diagram?
student
# How to define world interest rate using IS-LM-BP diagram?

(Asked by: username_0 on 2020-04-19)

Can you suggest where is the world interest rate in the economy which has a positive current account and a financial account surplus, fixed exchange rate and relative capital immobility? The graph of this should look like this: [![pic](https://i.sstatic.net/ldY9E.png)](https://i.sstatic.net/ldY9E.png)
Since NX and FA are positive, BP line is righter than the intersection of IS and LM curves, so $i\_0$ is the country's interest rate, but what is the world's one?

**Tags:** macroeconomics, interest-rate, exchange-rates, open-economy-macro, balance-of-trade

> **Comments:**
> **username_1**: What is the BP line?  
> **username_0**: BP = BOP (Balance of payment) = NX + FA  

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## 0 answers

