Refer to Figure 11.5. An increase in the marginal propensity to import is best illustrated by diagram

From an initial IS-LM equilibrium with a normally-sloped IS curve and a vertical LM curve, the money supply increases. A the new IS-LM equilibrium we have

A) higher income and a lower interest rate. B) higher income and an unchanged interest rate. C) an unchanged income and a lower interest rate. D) lower income and an unchanged interest rate. E) an unchanged income and a higher interest rate.

The current account is

A) the reserve assets created by the International Monetary Fund for countries to use in settling international payment obligations. B) the price of one nation's currency in term of the currency of another country. C) a category of the balance of payments transactions that measures flows of real and financial assets. D) a category of the balance of payments transactions that measures the exchange of merchandise, the exchange of services, and unilateral transfers.