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Use the Following to Answer Questions :
Exhibit: Shifting IS IS1I S _ { 1 } ^ { * }

Question 22

Multiple Choice

Use the following to answer questions :
Exhibit: Shifting IS* and LM*  Use the following to answer questions : 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  I S _ { 1 } ^ { * }   L M _ { 1 } ^ { * } .  Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _____ curve will shift to _____. A)  LM<sub>1</sub>*;  L M _ { 2 } ^ { * }  B)  LM<sub>1</sub>*;  L M _ { 3 } ^ { * }  C)  IS<sub>1</sub>*;  I S _ { 2 } ^ { * }  D)  IS<sub>1</sub>*;  I S _ { 3 } ^ { * }
-(Exhibit: Shifting IS* and LM*) A small open economy with a floating exchange rate is initially in equilibrium at A with IS1I S _ { 1 } ^ { * } LM1.L M _ { 1 } ^ { * } . Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _____ curve will shift to _____.


A) LM1*; LM2L M _ { 2 } ^ { * }
B) LM1*; LM3L M _ { 3 } ^ { * }
C) IS1*; IS2I S _ { 2 } ^ { * }
D) IS1*; IS3I S _ { 3 } ^ { * }

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