# Answer to Question #63540 in Macroeconomics for Hans

Question #63540

Assume perfect capital mobility and fixed nominal exchange rates. Which of the following statements about the derivation of the AD curve are true ?

Select one or more:

a. A decrease in P raises income. Thus the AD curve has a negative slope.

b. A decrease in P decreases the real exchange rate, which shifts the IS curve to the right. This raises equilibrium income.

c. A decrease in P increases the real exchange rate, which shifts the IS curve to the right. This raises equilibrium income.

d. The demand side equilibrium (for the derivation of the AD curve) is determined by the intersection of the IS and FE curve.

Select one or more:

a. A decrease in P raises income. Thus the AD curve has a negative slope.

b. A decrease in P decreases the real exchange rate, which shifts the IS curve to the right. This raises equilibrium income.

c. A decrease in P increases the real exchange rate, which shifts the IS curve to the right. This raises equilibrium income.

d. The demand side equilibrium (for the derivation of the AD curve) is determined by the intersection of the IS and FE curve.

Expert's answer

Dear Hans, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed:

**Submit order**Need a fast expert's response?

Submit orderand get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

## Comments

## Leave a comment