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07-12-2019
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A small open economy with a floating exchange rate is initially in equilibrium at A with IS1, LM1. Holding all else constant, if domestic consumers develop greater preferences for imported goods, then the _ curve will shift to _.A. LM; LM2B. LM; LM3C. IS; IS2D. IS; IS3

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austineemodi austineemodi

08-12-2019

Answer:

Option D is correct

Explanation:

The curve would shift to the left because there Is an increase in import product that is the I + G + X curve would fall as the S + T +IM curve rises due to increase in IM(import product) causing the income fall.

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