This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: In an economy operating under flexible exchange rates, explain why the IS curve is downward sloping. ... (Read 36 times)

bb

  • Hero Member
  • *****
  • Posts: 544
on: Jun 30, 2018
In an economy operating under flexible exchange rates, explain why the IS curve is downward sloping.
 
  What will be an ideal response?

Question 2

Which of the following countries had the highest level of output per capita in 1950?
 
  A) United States
  B) France
  C) Japan
  D) United Kingdom


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

dajones82

  • Sr. Member
  • ****
  • Posts: 359
Reply #1 on: Jun 30, 2018
Answer to Question 1

A reduction in i (assume zero inflation) will cause investment to increase for reasons discussed before. This causes an increase in Z and Y. There is a second effect now embedded in the IS curve. As i falls, the demand for the domestic currency drops causing a depreciation. This depreciation causes NX to rise and demand to rise even more. So, there are two components of demand that now change as i changes: I and NX.

Answer to Question 2

A


bb

  • Member
  • Posts: 544
Reply 2 on: Jun 30, 2018
Wow, this really help

lcapri7

  • Member
  • Posts: 350
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Titration Curve Titration Curve
The parts of a flexible sigmoidoscope. The parts of a flexible sigmoidoscope.
Normal red blood cells (RBCs) are flexible and donut-shaped and move with ease through blood ... Normal red blood cells (RBCs) are flexible and donut-shaped and move with ease through blood ...
Soils support plant growth through ion exchange Soils support plant growth through ion exchange
Age-Specific Fertility Rates Age-Specific Fertility Rates
Explain the myogenic autoregulation of the glomerular filtration rate Explain the myogenic autoregulation of the glomerular filtration rate
Video: DNA Replication

For a complete list of videos, visit our video library