A decrease in government purchases
A) shifts the IS curve up and to the right,leading to a higher interest rate and an appreciation of the exchange rate.
B) shifts the IS curve down and to the left,leading to a lower interest rate and a depreciation of the exchange rate.
C) shifts the LM curve left,leading to a lower interest rate and a depreciation of the exchange rate.
D) shifts the LM curve right,leading to a lower interest rate and a depreciation of the exchange rate.
Correct Answer:
Verified
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