Exhibit: IS*-LM* a Small Open Economy with a Fixed

question 70

Multiple Choice

Exhibit: IS*-LM* A small open economy with a fixed exchange rate e₂ is initially at equilibrium A with IS₁*, LM₁* and equilibrium output Y₁. If there is a monetary expansion, the new equilibrium will be at _____, holding everything else constant.

• A)A
• B)B
• C)C

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Definitions:

Distributes

refers to the process of giving or delivering something to a number of recipients, spreading items or resources evenly or according to a plan.

Consumes

To utilize something as a resource, often referring to the act of eating or drinking, but can also mean the usage of goods, services, or information.

Disproportionately Poor

A term describing how poverty affects certain groups of people more severely than others, often due to systemic inequalities.

African American Children

Children of African descent living in the United States, who may experience unique cultural, social, and economic circumstances as part of the African American community.