Suppose That Net Exports Were to Become More Sensitive to Changes

question 22

Multiple Choice

Suppose that net exports were to become more sensitive to changes in the interest rate. You would reflect this change by drawing

• A) steeper LM curves.
• B) flatter LM curves.
• C) steeper IS curves.
• D) flatter IS curves.
• E) IS and LM curves exactly as before.

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Definitions:

Partially Disclosed Principal

A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.

Nonperformance

The failure to fulfill a contractual obligation or carry out an agreement as specified.

Combust

The process of burning or igniting a substance, resulting in light, heat, and often combustion products like gases or ash.

Subside

Decrease in intensity or severity, often referring to something undesirable like pain, noise, or emotions.