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Question
Figure 13.2
Refer to Figure 13.2. In a flexible exchange rate regime, if an economy is experiencing external disequilibrium at point B, then the domestic currency will:
a. depreciate, shifting the IS curve to the right.
b. depreciate, shifting the IS curve to the left.
c. appreciate, shifting the IS curve to the right.
d. appreciate, shifting the LM curve to the left.
Answer
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