The Figure Given Below Depicts the IS-LM-FE Model with Floating

question 43

Multiple Choice

The figure given below depicts the IS-LM-FE model with floating exchange rates. The domestic currency:

• A)is under the pressure to appreciate.
• B)is under the pressure to depreciate.
• C)can remain relatively stable.
• D)is at its possible highest value in the foreign exchange market vis-à-vis other currencies.

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