Which of the Following Is a General Rule for How

question 53

Multiple Choice

Which of the following is a general rule for how demand shocks affect the IS curve?

• A) Demand shocks will always show up as changes in the expected real exchange rate.
• B) Demand shocks are usually rare and have little effect.
• C) When any exogenous variable works to increase demand, IS shifts to the right and, conversely, when any exogenous variable works to decrease demand, IS shifts to the left.
• D) When any exogenous variable works to increase demand, IS shifts to the left and conversely, when any exogenous variable works to decrease demand, IS shifts to the right.

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Definitions:

Central Nervous

Central to the nervous system, comprising the brain and spinal cord, responsible for processing and sending out signals to the body.

Endocrine

Pertaining to glands that secrete hormones or to the hormones themselves, which are released into the bloodstream to affect distant organs.

Estrogens

A class of hormones, including estradiol, that are more prevalent in females; they are associated with the development of the secondary and primary sex characteristics and with sexual behavior.

Androgens

A class of hormones, including testosterone, that are more prevalent in males; they are associated with the development of the secondary and primary sex characteristics and with sexual behavior.