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The Figure Below Shows an IS-LM-FE Model for an Economy

question 26

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The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy was at point A, a triple intersection. Here, the FE curve is flatter than the LM curve. The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy was at point A, a triple intersection. Here, the FE curve is flatter than the LM curve.   Assume that the economy was initially at point A. Which of the following would have moved the economy to point B? A) Expansionary monetary policy with sterilization B) Expansionary monetary policy without sterilization C) Expansionary fiscal policy with sterilization D) Contractionary fiscal policy without sterilization Assume that the economy was initially at point A. Which of the following would have moved the economy to point B?


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