Chap027

Chap027 - Chapter 27 - Prices and Output in the Open...

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Chapter 27 - Prices and Output in the Open Economy Chapter 27 Prices and Output in the Open Economy Multiple Choice Questions 1. Other things equal, with imported intermediate goods, an increase in foreign prices will lead to a __________ shift in a home country's short-run aggregate supply curve and __________ shift in the home country's aggregate demand curve. a. Leftward; also to a leftward B . Leftward; to a rightward c. Rightward; to a leftward d. Rightward; also to a rightward 2. Expansionary aggregate demand-oriented fiscal policy leads, ceteris paribus, to a. A short-run fall in both income and the price level b. A short-run rise in income and a fall in the price level C . No change in the long-run equilibrium level of income and to an increase in the price level d. Both an increase in the long-run equilibrium level of income and an increase in the price level 3. Other things equal, a rise in foreign interest rates leads to __________ in the home country's equilibrium level of income and to __________ in the home country's price level in the short run. a. A rise; a fall b. A rise; no change c. No change; a fall D . A rise; a rise 27-1
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4. According to the New Classical economists, with rational expectations, an increase in the money supply will A . Lead only to an increase in prices in both the short run and the long run b. Lead to an increase in the equilibrium level of income in the short run but to no change in
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Chap027 - Chapter 27 - Prices and Output in the Open...

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