Why does an exchange rate-output combination lying above both DD and AA jump first to AA in equilibrium?
A) Asset prices can adjust immediately.
B) Production plans can adjust immediately.
C) to preserve full employment
D) Prices are nominal and demand is real.
E) Aggregate demand adjusts faster than output.
A
Economics
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Equilibrium in the loanable funds market determines
A) the real interest rate. B) the nominal interest rate. C) the current interest rate. D) the expected interest rate.
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In a two-period model, as long as wealth effects are small, an increase in the world real interest rate
A) increases consumption and increases the current account surplus. B) increases consumption and decreases the current account surplus. C) decreases consumption and increases the current account surplus. D) decreases consumption and decreases the current account surplus.
Economics