IS-LM-BP Model: How will income and interest rate change if government expenditure is increased?
Yes, the diagram represented in the question is correct. Assuming imperfect capital mobility (with the BP curve steeper than the LM curve), an increase in G will:


Move the IS curve to the right. 
At this point (B), there will be a BOP deficit because the point is below the BP curve. 
Thus, the domestic currency will depreciate. 
Exports will rise, imports will decrease and thus net exports will rise. 
This will have two effects: (a) this will shift the IS curve further to the right (because net exports have risen, and so Y has risen) and (b) this will shift the BP curve to the right (because net exports have risen, improving the current account balance). 
The new equilibrium is at C.


I found a better diagram illustrating this (the diagram includes two cases: one with the BP flatter than the LM and one steeper; the points and movements marked with an asterik (*) are the ones concerned with the case of BP being steeper than the LM). (Image Courtesy of Polinomics: http://policonomics.com/is-lm-bp/)