The IS/LM/BP Analysis Suggests That, If the BP Curve Is

question 10

Multiple Choice

The IS/LM/BP analysis suggests that, if the BP curve is steeper than the LM curve and The exchange rate is flexible, contractionary fiscal policy by country A will lead to __________ in country A's balance of payments and hence to __________ of A's
Currency relative to other currencies.

• A) an incipient deficit; an appreciation
• B) an incipient deficit; a depreciation
• C) an incipient surplus; an appreciation
• D) an incipient surplus; a depreciation

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Definitions:

Cones

Photoreceptor cells in the retina of the eye responsible for color vision and function best in relatively bright light, as opposed to rods, which work better in dim light.

Cortex

The outer layer of the brain, involved in numerous high-level functions including thought, memory, perception, and language.

Rods

Cells in the eye's retina known as photoreceptors that enable vision under dim lighting conditions.

Visible Spectrum

The portion of the electromagnetic spectrum that is visible to the human eye, comprising wavelengths from approximately 380 to 750 nanometers.