As the Economy Moves Up and to the Left Along

question 10

Multiple Choice

As the economy moves up and to the left along the IS curve,which of the following will occur when exchange rates are flexible?

• A)investment spending decreases
• B)consumption decreases
• C)the domestic currency appreciates
• D)all of the above
• E) none of the above

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Definitions:

Specific

Clearly defined or identified; precise or particular.

Free Energy

The portion of a system's energy that can perform work when temperature and pressure are uniform throughout the system.

Spontaneously

Occurring without external cause or intervention, often in a natural or unexpected manner.

Units

A standard measurement used to quantify physical properties such as length, mass, volume, or time.