Why Does the LL Schedule Have a Negative Slope

question 3

Multiple Choice

Why does the LL schedule have a negative slope?

• A) The economic stability loss from pegging to the area's currencies rises as the degree of economic interdependence rises.
• B) The economic stability loss from pegging to the area's currencies falls as the degree of economic interdependence rises.
• C) The economic stability loss from pegging to the area's currencies falls as the degree of economic interdependence falls.
• D) The economic stability loss from pegging to the area's currencies rises as the degree of economic activity increases.
• E) The economic stability loss from pegging to the area's currencies is constant, even as the degree of economic activity increases.

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