A Classical IS-LM Model of the World Economy Can Be

question 33

Multiple Choice

A classical IS-LM model of the world economy can be used to show that in a flexible exchange-rate system,a temporary increase in government purchases will cause

• A)output and the real interest rate to rise, which reduces net exports but has an ambiguous effect on the real exchange rate.
• B)output and the real interest rate to rise, which increases net exports but has an ambiguous effect on the real exchange rate.
• C)output to rise and the real interest rate to fall, which reduces net exports and causes the exchange rate to depreciate.
• D)the real interest rate to fall, which causes the exchange rate to rise, which reduces net exports.

---

Definitions:

Never-married Parents

Individuals who have children but have never been legally married to another individual at any point.

Marry

The legally or formally recognized union of two people as partners in a personal relationship.

Eastern Culture

Refers to the customs, traditions, and social values originating from countries in Asia, emphasizing communal living and philosophies like Confucianism and Buddhism.

Romantic Love

A type of love characterized by passion, intimacy, and commitment between partners.