Suppose Net Exports Were to Become Less Sensitive to Changes

question 26

Multiple Choice

Suppose net exports were to become less sensitive to changes in the interest rate. You would then draw

• A) flatter IS and aggregate demand curves.
• B) flatter LM and aggregate demand curves.
• C) a flatter IS curve and a correspondingly steeper aggregate demand curve.
• D) steeper IS and aggregate demand curves.
• E) a steeper IS curve and a correspondingly flatter aggregate demand curve.

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Definitions:

Tolerance

The diminishing effect with regular use of the same dose of a drug, requiring the user to take larger and larger doses before experiencing the drug’s effect.

Positive Suggestions

Recommendations or proposals that are optimistic in tone and are meant to improve or enhance a situation.

Psychoactive Drugs

Substances that affect the brain and change mood, awareness, thoughts, feelings, or behavior.

Neurotransmission

The process by which nerve cells communicate with each other or with muscles or glands, through the release and reception of chemicals called neurotransmitters.