Determine if each statement is True/False 6. An increase in the money supply shifts the LM...

Determine if each statement is True/False

6. An increase in the money supply shifts the LM curve to the right.

7. Expansionary monetary policy is not effective in increasing domestic output under floating exchange rate regimes.

8. An increase in G shifts the IS curve to the left.

9. An increase in domestic interest rates increases the capital account.

10. An increase in e ($/£), a dollar depreciation, should result in an increase in export revenues.

11. A currency depreciation shifts the BP curve to the left.

12. A decrease in consumption C shifts the IS curve to the right.

13. An increase in interest rates shift the Aggregate Expenditure curve to the right.

14. Expansionary fiscal policy is relatively more effective in increasing output in a floating exchange rate regime compared to a fixed exchange rate regime.

15. Expansionary monetary policy is relatively more effective in increasing output in a floating

exchange rate regime compared to a fixed exchange rate regime.

16. According to the GG-LL model optimum currency areas are most appropriate for areas closely integrated through international trade and factor movements.

17. According to the GG-LL model, an increase in the size and frequency of shocks in the domestic economy will shift the LL curve to the right.

Solutions

Expert Solution

Rahul Sunny answered 2 weeks ago

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