Multiple Choice
In an IS-LM model, if net exports is no longer assumed to be exogenous (that is, NX = NX?) , but instead is assumed to decrease as the level of income increases (that is, NX = NX? - mY, with m > 0) , then
A) the IS-curve will become steeper and shift to the left
B) the IS-curve will become flatter and shift to the right
C) the LM-curve will become steeper and shift to the left
D) the LM-curve will become flatter and shift to the right
E) the fiscal policy multiplier will become larger
Correct Answer:

Verified
Correct Answer:
Verified
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