Answer to Question #231271 in Macroeconomics for Mmathapelo Agnes

Question

In an open economy, the impact of an increase in the interest rate on the demand for goods
and the level of output in the goods market can be illustrated by the following chain of events:
1. i↑ → E↓ → X↑ → NX↓
2. i↑ → E↑ → X↓ → Z↓ → Y↓
3. E↓ → X↑ → NX↑ → Z↑ → Y↑
4. i↑ → I↓ → Z↑ → Y↑ → NX↓

Answer 1

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