Use the Following to Answer Questions :
Exhibit: Shifting IS $I S _ { 1 } ^ { * }$

question 107

Multiple Choice

Use the following to answer questions :
Exhibit: Shifting IS* and LM*
-(Exhibit: Shifting IS* and LM*) A small open economy with a floating exchange rate is initially in equilibrium at A with $I S _ { 1 } ^ { * }$ $L M _ { 1 } ^ { * } .$ Holding all else constant, if the government imposes a tariff on imports in order to protect domestic jobs, then the _____ curve will shift to _____.

• A) LM₁*; \(L M _ { 2 } ^ { * }\)
• B) LM₁*; \(L M _ { 3 } ^ { * }\)
• C) IS₁*; \(I S _ { 2 } ^ { * * }\)
• D) IS₁*; \(I S _ { 3 } ^ { * }\)

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Definitions:

Logistic Equation

A mathematical model used to describe the growth of populations under limiting factors, showing how a population can reach a carrying capacity.

Exponential Growth

A pattern of data that increases more rapidly in proportion to the growing total number, commonly seen in populations or investments.

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment.

Logistic Equation

A mathematical model used to describe the growth of populations under limiting conditions, showing a sigmoid curve.