Exhibit: Shifting IS* and LM* A small open economy with a floating exchange rate is initially in equilibrium at A with Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _____ curve will shift to _____. A)LM₁*; LM₂* B)LM₁*; LM₃* C)IS₁*; IS₂* D)IS₁*; IS₃*

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The Answer of Exhibit: Shifting IS* and LM* A small open economy with a floating exchange rate is initially in equilibrium at A with Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _____ curve will shift to _____. A)LM₁*; LM₂* B)LM₁*; LM₃* C)IS₁*; IS₂* D)IS₁*; IS₃*

Exhibit: Shifting IS* and LM* a Small Open Economy