If the marginal propensity to import is high, then which of the following will be true?
A. The IS curve is steeper
B. It will create currency appreciation
C. It will make the LM curve flatter
D. For each level of income, the interest rate must be high to achieve external balance
E. For each level of interest rate, higher income will be generated to achieve BOP equation
Choose the correct answer from the options given below:
1
A and D only
2
A and B only
3
A, B, C and D only
4
A, D and E only