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Exhibit: Shifting IS* and LM*
-(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*;
B) LM1*;
C) IS1*;
D) IS1*;
Correct Answer:
Verified
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