Inflation results
(a) when the price of one good or service increases.
(b) when too much money is chasing too few goods.
(c) when prices, on average, decrease across the economy.
(d) when banks decrease lending.
(b)
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Assuming the Marshall-Lerner condition holds and using the ZZ/Y and NX graphs, illustrate graphically and explain what effect a real appreciation will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria
What will be an ideal response?
You would expect that your firm is experiencing a constant returns to scale if
a. Long run average costs increase with output b. Long run average costs decrease with output c. Long run average costs are constant with respect to output d. None of the above