Exhibit 16-1 -Referring to Exhibit 16-1, an Increase in the Level of the Level

question 131

Multiple Choice

Exhibit 16-1
-Referring to Exhibit 16-1, an increase in the level of real GDP will cause a move from

• A)B to A
• B)A to B
• C)D_M to D_M'
• D)D_M to D_M*
• E)E to F

Analyze the influence of U.S. residents' purchases of foreign assets on exchange rates and market curves.

Evaluate the consequences of fiscal policy changes on government deficit, net capital outflow, and the economy.

Determine the effect of changes in fiscal policy on the market for loanable funds and foreign exchange market.

Understand the impact of changes in perceived asset risks on the loanable funds market and exchange rates.

---

Definitions:

Neurons

Specialized cells within the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Motor Nerves

Nerves that transmit impulses from the central nervous system to muscles, causing movement.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which serves as the primary control center for processing and sending out information.

Internal Organs

Organs located inside the body that perform essential functions, such as the heart, liver, and kidneys.