In an open economy under flexible exchange rates and represented by the IS- LM- IP model, a tax increase will cause a decrease in which of the following?
A) Exports.
B) Net exports.
C) The exchange rate.
D) Both A and B.
E) Both B and C.

Question

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The Answer of In an open economy under flexible exchange rates and represented by the IS- LM- IP model, a tax increase will cause a decrease in which of the following?
A) Exports.
B) Net exports.
C) The exchange rate.
D) Both A and B.
E) Both B and C.

In an Open Economy Under Flexible Exchange Rates and Represented