Suppose policy makers want to increase Y and increase NX. Which ...

[ENagel]

Suppose policy makers want to increase Y and increase NX. Which of the following policies would most likely achieve this?
 
  A) an increase in government spending
  B) a real depreciation
  C) a reduction in taxes and an increase in the real exchange rate
  D) an increase in the real exchange rate

Question 2

Use the IS-LM-PC model to illustrate how the economy adjusts to an increase in taxes both in the short run and in the medium run.
 
  What will be an ideal response?

[dyrone]

Answer to Question 1

B

Answer to Question 2

Refer to figure 9-4 of the textbook.

[ENagel]

TYSM

[EAN94]

Thanks for the timely response, appreciate it