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Use the Following to Answer Questions :
Exhibit: IS*-LM IS1I S _ { 1 } ^ { * }

Question 58

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Use the following to answer questions :
Exhibit: IS*-LM*  Use the following to answer questions : Exhibit: IS*-LM*   -(Exhibit: IS*-LM*)  A small open economy with a floating exchange rate is initially at equilibrium A with  I S _ { 1 } ^ { * }   L M _ { 1 } ^ { * }  equilibrium exchange rate e<sub>2</sub>, and equilibrium output Y<sub>1</sub>. If there is a monetary expansion to  L M _ { 2 } ^ { * }  the new equilibrium will be at ____, holding everything else constant. A)  A B)  B C)  C D)  D
-(Exhibit: IS*-LM*) A small open economy with a floating exchange rate is initially at equilibrium A with IS1I S _ { 1 } ^ { * } LM1L M _ { 1 } ^ { * } equilibrium exchange rate e2, and equilibrium output Y1. If there is a monetary expansion to LM2L M _ { 2 } ^ { * } the new equilibrium will be at ____, holding everything else constant.


A) A
B) B
C) C
D) D

Correct Answer:

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