Use the following to answer questions :
Exhibit: Shifting IS* and LM* $Use the following to answer questions : Exhibit: Shifting IS* and LM* -(Exhibit: Shifting IS* and LM*) A small open economy with a floating exchange rate is initially in equilibrium at A with I S _ { 1 } ^ { * } L M _ { 1 } ^ { * } . Holding all else constant, if the government imposes a tariff on imports in order to protect domestic jobs, then the _____ curve will shift to _____. A) LM1*; L M _ { 2 } ^ { * } B) LM1*; L M _ { 3 } ^ { * } C) IS1*; I S _ { 2 } ^ { * * } D) IS1*; I S _ { 3 } ^ { * }$
-(Exhibit: Shifting IS* and LM*) A small open economy with a floating exchange rate is initially in equilibrium at A with

I S _ { 1 } ^ { * }

L M _ { 1 } ^ { * } .

Holding all else constant, if the government imposes a tariff on imports in order to protect domestic jobs, then the _____ curve will shift to _____.
A) LM₁*;

L M _ { 2 } ^ { * }

B) LM₁*;

L M _ { 3 } ^ { * }

C) IS₁*;

I S _ { 2 } ^ { * * }

D) IS₁*;

I S _ { 3 } ^ { * }

According to the Mundell-Fleming Model, in an Economy with Flexible

Multiple Choice

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