A devaluation of the exchange rate will:
A)shift the IS curve to the right.
B)shift the LM curve to the right.
C)shift the FE curve to the left.
D)lead to a financial account surplus.

Question

Quizplus · Accepted Answer

A devaluation of the exchange rate will increase exports and reduce imports, leading to an increase in net exports (NX). This will shift the IS curve to the right, representing an increase in output and income.

A Devaluation of the Exchange Rate Will