For this question, assume the Marshal-Lerner condition holds. ...

[Deast7027]

For this question, assume the Marshal-Lerner condition holds. Which of the following would occur as a result of an increase in the real exchange rate?
 
  A) an improvement of the trade balance
  B) a reduction in the quantity of imports
  C) an increase in domestic output
  D) all of the above
  E) none of the above

Question 2

When the policy rate decreases,
 
  A) IS curve does not change.
  B) IS curve shifts to the right.
  C) IS curve shifts to the left.
  D) LM curve shifts upward.
  E) LM curve shifts downward.

[coyin]

Answer to Question 1

E

Answer to Question 2

A

[Deast7027]

TYSM

[ecabral0]

Excellent