In Considering the Slope of the Open-Economy Aggregate Demand Curve

Multiple Choice

In considering the slope of the open-economy aggregate demand curve (AD) , a valid general statement is that, other things equal, the open-economy AD __________.

A) will tend to be flatter with flexible rates than with fixed rates
B) will tend to be steeper with flexible rates than with fixed rates
C) will necessarily have the same slope with flexible rates as with fixed rates
D) will tend to be flatter or steeper, or will necessarily have the same slope, with flexible rates as with fixed rates - cannot be determined without more information.