Exhibit 9-4
-In Exhibit 9-4, which of the following will cause a shift from X-M to X*-M*?
A)a decline in the value of a nation's currency relative to other currencies
B)an increase in the value of a nation's currency relative to other currencies
C)an increase in real disposable income
D)an increase in real GDP

Question

Exhibit 9-4 
-In Exhibit 9-4, which of the following will cause a shift from X-M to X*-M*?
A)a decline in the value of a nation's currency relative to other currencies 
B)an increase in the value of a nation's currency relative to other currencies 
C)an increase in real disposable income 
D)an increase in real GDP

Quizplus · Accepted Answer

An increase in the value of a nation's currency makes exports more expensive and imports cheaper, leading to a shift from X-M to X*-M*.

Exhibit 9-4 -In Exhibit 9-4, Which of the Following Will Cause a Will