The open-economy macroeconomic model takes
a. GDP, but not the price level as given.
b. the price level, but not GDP as given.
c. both the price level and GDP as given.
d. the price level and GDP as variables to be determined by the model.
c
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Describe the circular flow of the economy by discussing the two markets where households and firms meet
What will be an ideal response?
Which of the following sequences results from a decrease in the price level?
a. the money demand curve shifts leftward, the interest rate decreases, investment spending and autonomous consumption increase, the aggregate expenditure line shifts upward, and there is a rightward movement along the aggregate demand curve. b. the money demand curve shifts rightward, the interest rate increases, investment spending and autonomous consumption increase, the aggregate expenditure line shifts downward, and there is a rightward movement along the aggregate demand curve. c. the money demand curve shifts leftward, the interest rate decreases, investment spending and autonomous consumption increase, the aggregate expenditure line shifts upward, and there is a leftward movement along the aggregate demand curve. d. the money demand curve shifts rightward, the interest rate decreases, investment spending and autonomous consumption increase, the aggregate expenditure line shifts upward, and there is a movement upward along the aggregate demand curve. e. the money demand curve shifts leftward, the interest rate increases, investment spending and autonomous consumption increase, the aggregate expenditure line shifts upward, and there is a leftward movement along the aggregate demand curve.