Please solve all the three Multiple choice questions mentioned below: 1. Question in the image: a. Not exist b. will be horizontal c. Upward sloping like the usual LM curve d. None of the above
Please solve all the three Multiple choice questions mentioned below:
1. Question in the image:
a. Not exist
b. will be horizontal
c. Upward sloping like the usual LM curve
d. None of the above
2. If in the short run, IS LM equilibrium occurs at a level of income above the natural rate of output, in the long run the output will return to the natural rate via:
a. an increase in the price level
b. a decrease in the interest rate
c. an increase in the money supply
d. a downward shift in the consumption function
3. Suppose that there are two countries, B and C, that have no trade and no financial transactions with any other countries except each other. B imports a total of goods worth 10 million 'bollars' from C, where a bollar is a unit of B's currency. B has no exports. Which of the following must be true?
a. B has a capital account deficit
b. C has a current account deficit
c. C is buying assets from B
d. The exchange rate of collars per bollar is bigger than 1, where collar is C's currency.
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