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

Author Question: Explain what effect each of the following events will have on the IS curve in a flexible exchange ... (Read 58 times)

Starlight

  • Hero Member
  • *****
  • Posts: 567
on: Jun 30, 2018
Explain what effect each of the following events will have on the IS curve in a flexible exchange rate regime: (1 ) an increase in foreign output; (2 ) a reduction in the foreign interest rate; and (3 ) an increase in the domestic interest rate.
 
  What will be an ideal response?

Question 2

Assume that constant returns to scale exists and that N and K both decrease by 3. Given this information, we know that
 
  A) output (Y) will decrease 6.
  B) Y will decrease by 3.
  C) Y will decrease by less than 3.
  D) the capital-labor ratio (K/N) will decrease.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

kristenb95

  • Sr. Member
  • ****
  • Posts: 318
Reply #1 on: Jun 30, 2018
Answer to Question 1

An increase in Y causes X to rise, Z to rise, and the IS curve to shift to the right. A reduction in i will cause an appreciation of the domestic currency, a reduction in NX, and a leftward shift in the IS curve. A change in i will only cause a movement along the IS curve.

Answer to Question 2

B


Starlight

  • Member
  • Posts: 567
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

Dinolord

  • Member
  • Posts: 313
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Each year in the United States, there are approximately six million pregnancies. This means that at any one time, about 4% of women in the United States are pregnant.

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?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Did you know?

When blood is deoxygenated and flowing back to the heart through the veins, it is dark reddish-blue in color. Blood in the arteries that is oxygenated and flowing out to the body is bright red. Whereas arterial blood comes out in spurts, venous blood flows.

There are multiple pathways for heat exchange between organisms and the environment. There are multiple pathways for heat exchange between organisms and the environment.
Effect of extracellular osmolarity on water movement across a plasma membrane Effect of extracellular osmolarity on water movement across a plasma membrane
The Placebo Effect The Placebo Effect
Major events in the storage, retrieval, and use of fuels in the fed and unfed states Major events in the storage, retrieval, and use of fuels in the fed and unfed states
Actions of mutM, mutT, and mutY gene products in countering the mutagenic effect of 8-oxoguanine -oG Actions of mutM, mutT, and mutY gene products in countering the mutagenic effect of 8-oxoguanine -oG
Events of an Ovarian/Mentrual Cycle Lasting Twenty-Eight Days Events of an Ovarian/Mentrual Cycle Lasting Twenty-Eight Days
Video: Medullary osmotic gradient: countercurrent multiplier, urea recycling & vasa recta countercurrent exchange

For a complete list of videos, visit our video library