Assume That the FE Curve Is Flatter Than the LM

question 22

Multiple Choice

Assume that the FE curve is flatter than the LM curve. A negative internal shock shifts the IS curve leftward. Under zero sterilization, which one of the following will happen next?

• A)Because of the incipient balance of payments deficit, the LM curve will shift leftward
• B)Because of the incipient balance of payments surplus, the LM curve will shift rightward
• C)Because of the incipient balance of payments deficit, the IS curve will shift leftward
• D)Because of the incipient balance of payments surplus, the IS curve will shift rightward

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Definitions:

Agents of Political Socialization

Individuals, institutions, and experiences that contribute to and influence the political beliefs and values of individuals, such as family, schools, and media.

Populism

A political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups.

Communitarianism

A social philosophy emphasizing the importance of community in the functioning of political life, often valuing community goals over individual ones.

Equality of Condition

A social state in which people have the same status in certain respects, including civil rights, freedom of speech, property rights, and equal access to social goods and services.