In the open-economy IS-LM model, an increase in the domestic interest rater will, other things equal, cause domestic investment to and the trade balance to O increase; increase decrease; increase increase; decrease O decrease; decrease

In the open-economy IS-LM model, an increase in the domestic interest rater will, other things equal, cause domestic investment to and the trade balance to O increase; increase decrease; increase increase; decrease O decrease; decrease

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter31: Open-Economy Macroeconomics: Basic Concepts

Section31.2: The Price For International transaction: Real And Nominal Exchange Rate

Problem 2QQ

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Question

In the open-economy IS-LM model, an increase in the domestic interest raterwill, other things
equal, cause domestic investment to
and the trade balance to
O increase; increase
decrease; increase
increase; decrease
O decrease; decrease

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