Solved

In an IS-LM Model, If Net Exports Is No Longer

Question 6

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:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions