Exhibit: Shifting IS* and LM* a Small Open Economy

question 19

Multiple Choice

Exhibit: Shifting IS* and LM* A small open economy with a floating exchange rate is initially in equilibrium at A with Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _____ curve will shift to _____.

• A)LM₁*; LM₂*
• B)LM₁*; LM₃*
• C)IS₁*; IS₂*
• D)IS₁*; IS₃*

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Definitions:

Obsessive-Compulsive Disorder

A chronic anxiety disorder characterized by uncontrollable, recurring thoughts (obsessions) and behaviors (compulsions) that the individual feels the urge to repeat continuously.

Glycogen

A multibranched polysaccharide of glucose that serves as a form of energy storage in humans, animals, fungi, and bacteria.

Reductionism

The approach of analyzing complex phenomena by breaking them down into their simpler components.

Integrative Perspective

An approach that combines various theoretical orientations or methodologies to provide a more comprehensive understanding or solution.