« previous next »

Author Question: A change in which of the following causes a shift in the IS curve? A) autonomous investment B) ... (Read 166 times)

serike

  • Hero Member
  • *****
  • Posts: 542
on: Jun 30, 2018
A change in which of the following causes a shift in the IS curve?
 
  A) autonomous investment
  B) autonomous net exports
  C) taxes
  D) all of the above
  E) none of the above

Question 2

How does the open-economy IS-MP model incorporate net exports with a floating exchange rate system?
 
  What will be an ideal response?


janeli1

  • Sr. Member
  • ****
  • Posts: 330
Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

The impact of the real interest rate on the floating exchange-rate system makes total expenditures more responsive to changes in the real interest rate, causing the IS curve to be more elastic (flatter). For example, an increase in the real interest rate increases the exchange rate, decreasing net exports. So, the higher real interest rate decreases not only investment and consumption expenditures, but also net exports.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con
Tai chi walk along straight line. From tai chi stance, shift weight to the back leg and turn the ... Tai chi walk along straight line. From tai chi stance, shift weight to the back leg and turn the ...
J or U dose-response curve J or U dose-response curve
Hockey stick” curve Hockey stick” curve
Climate Change: Timescale decades to centuries Climate Change: Timescale decades to centuries
Ice cores as indicators of environmental change Ice cores as indicators of environmental change
Video: Dendrite Animation

For a complete list of videos, visit our video library