We only needed to consider the FE curve and the IS curve when discussing
the Mundell-Fleming model under fixed exchange rates. Mandatory
intervention of the central bank in the foreign exchange market
would adjust the money supply so as to move the LM curve into the
predetermined position as well.
For the same reason, we now only need to consider the FE plane
and the IS plane when deriving the AD curve under fixed exchange
rates. Endogenous adjustment of the money supply through foreign
exchange market intervention will make sure that the LM plane passively
moves into the proper position.
The following animation shows how to extract the AD curve from a
3-dimensional graph that merges the FE plane and the IS plane.
View animated illustration