As the economy moves up and to the right along the IS curve, ...

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As the economy moves up and to the right along the IS curve, which of the following will occur when exchange rates are flexible?
 
  A) investment spending increases
  B) consumption increases
  C) the domestic currency depreciates
  D) all of the above
  E) none of the above

Question 2

When switching from the current exchange rate method to the purchasing power parity method, India's standard of living in dollars
 
  A) decreases.
  B) remains essentially the same.
  C) rises, but still remains far below that of the U.S.
  D) rises almost to the level of the U.S.
  E) leapfrogs over that of the U.S.

[kilada]

Answer to Question 1

D

Answer to Question 2

C

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Gracias!

[vickybb89]

Excellent