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

question 105

Multiple Choice

Use the following to answer questions :
Exhibit: IS*-LM*
-(Exhibit: IS*-LM*) A small open economy with a fixed exchange rate e₂ is initially at equilibrium A with $I S _ { 1 } ^ { * }$ $L M _ { 1 } ^ { * }$ and equilibrium output Y₁. If there is an increase in government spending to $I S _ { 2 } ^ { * }$ the new equilibrium will be at ____, holding everything else constant.

• A) A
• B) B
• C) C
• D) D

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Definitions:

Industrial Production

The process of using machinery and technology to manufacture goods on a large scale, significantly contributing to economic development.

Productive Activity

Actions or tasks that contribute to the production of goods and services in an economy.

Class-for-itself

Refers to a social group that is self-aware of its social position and its interests within the broader social structure.

Exploitation

The action or fact of treating someone unfairly in order to benefit from their work or resources.