WendyEller-Assignment-Unit 6

WendyEller-Assignment-Unit 6 - Wendy Eller BU 204-02AU...

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Wendy Eller BU 204-02AU November 24, 2009 Assignment-Unit 6 Chapter 10 Problem 1 Your study partner is confused by the upward-sloping short-run aggregate supply curve and the vertical long-run aggregate supply curve. How would you explain why these slopes differ? Answer: I would explain to him or her that an upward sloping short run aggregate supply curve would be horizontal because it shows the relationship between the aggregate price levels and the quantity of the output that is supplied. Then I would explain to him or her that the long run aggregate supply curve would be vertical because it shows the relationship between the aggregate price levels and the quantity of the output that is supplied. Problem 4 A fall in the value of the dollar against other currencies makes U.S. final goods and services cheaper to foreigners even though the U.S. aggregate price level stays the same. As a result, foreigners demand more American aggregate output. Your study partner says that this represents
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WendyEller-Assignment-Unit 6 - Wendy Eller BU 204-02AU...

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