Figure 32-7 Refer to This Diagram of the Open-Economy Macroeconomic Model of Model

question 103

Multiple Choice

Figure 32-7
Refer to this diagram of the open-economy macroeconomic model of the Mexican economy to answer the questions below.
-Refer to Figure 32-7.Suppose that the Mexican economy starts at r2 and e3.Which of the following is consistent with the effects of capital flight?

• A)a shift from D2 to D1 in Panel A
• B)a shift from NCO1 to NCO2 in Panel B
• C)a shift from D2 to D1 in Panel C
• D)All of the above shifts are consistent with the effects of capital flight.

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