In a Situation of Flexible Exchange Rates, Other Things Equal

Multiple Choice

In a situation of flexible exchange rates, other things equal, a shift of the IS curve to the left will lead to __________ of the country's currency if the BP curve is steeper than the LM curve and __________ of the country's currency if the LM curve is steeper than The BP curve.

A) an appreciation; also will lead to an appreciation
B) an appreciation; will lead to a depreciation
C) a depreciation; will lead to an appreciation
D) a depreciation; also will lead to a depreciation