If a Country's BP Curve Is Upward-Sloping (I

question 5

Multiple Choice

If a country's BP curve is upward-sloping (i.e., it is neither vertical nor horizontal) , then An intersection of the country's IS and LM curves at a point above the BP curve will be Associated with __________ in the country's balance of payments. With flexible Exchange rates, the country's BP curve will consequently shift __________.

• A) an incipient deficit; upward and to the left
• B) an incipient deficit; downward and to the right
• C) an incipient surplus; upward and to the left
• D) an incipient surplus; downward and to the right