Assume Perfect Capital Mobility and a Fixed Exchange Rate System

question 45

Multiple Choice

Assume perfect capital mobility and a fixed exchange rate system.Then,an increase in government spending would shift the

• A)LM schedule to the left.
• B)BP schedule to the right.
• C)BP schedule to the left.
• D)IS schedule to the right.

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Definitions:

Element

is a substance that cannot be broken down into simpler substances by chemical means, consisting of atoms with the same number of protons.

Proton

A subatomic particle found in the nucleus of an atom, carrying a positive electric charge and contributing to the atomic number and mass of the atom.

Neutron

A subatomic particle found in the nucleus of an atom that has no electrical charge and a mass slightly larger than that of a proton.

Medial

Positioned towards the midline of the body.