Imagine that the economy is at a point on that is below both AA and DD, where both the output and asset markets are out of equilibrium. Which first action is TRUE?
A) The economy will stay at this level in the short run.
B) The exchange rate will first rise to a point on the AA schedule.
C) The exchange rate will first rise to a point on the DD schedule.
D) The AA-DD equilibrium will shift to the position of the economy.
E) The output level will first increase to a position on the DD schedule.
B
Economics
You might also like to view...
Refer to the information above. What is the level of consumption when the level of income is 850?
A) 375 B) 425 C) 450 D) 475
Economics
Exhibit 9-2 A monopolistic competitive firm
?
To maximize long-run profits, the monopolistically competitive firm shown in Exhibit 9-2 will charge a price per unit of:
A. zero. B. $5. C. $10. D. $15.
Economics