« previous next »

Author Question: A change in which of the following causes a shift in the IS curve? A) autonomous investment B) ... (Read 193 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?

Aspirin is the most widely used drug in the world. It has even been recognized as such by the Guinness Book of World Records.

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Carbamazepine can interfere with the results of home pregnancy tests. If you are taking carbamazepine, do not try to test for pregnancy at home.

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus
Blood PH Curve Hemoglobin Blood PH Curve Hemoglobin
Natural Causes of Climate Change Natural Causes of Climate Change
Binding change model for ATP synthase Binding change model for ATP synthase
The change in the net of an irradiance, in Wm-2, at the tropopause The change in the net of an irradiance, in Wm-2, at the tropopause
A bell-shaped, or “normal,” curve shows the distribution of phenotypes for traits controlled by ... A bell-shaped, or “normal,” curve shows the distribution of phenotypes for traits controlled by ...
Video: Introduction to Pre-eclampsia

For a complete list of videos, visit our video library