2 True, False or Uncertain

For each of the following statements determine if the statement is TRUE, FALSE, or UNCERTAIN. You must justify your answer either graphically or in words.

No credit will be given without an explanation

a."An increase in the nominal exchange rate (e) will cause the IS* curve to shift to the right."

b."If the value of the currency is reduced via a devaluation in a fixed exchange rate regime, then income will rise, but net exports will remain unchanged