Practice_Qs_AD_AS_Monetary_Policy-2 - AD-AS; Monetary...

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Unformatted text preview: AD-AS; Monetary Policy1.Suppose the short-run aggregate-supply curve slopes upward and that international speculators lose confidence in foreign economies and want to move some of their wealth into the U.S. economy. Using the model of aggregate demand and aggregate supply, the short-run effects of this speculative activity would includea.an increase in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level.b.an increase in the value of the U.S. dollar in foreign exchange markets, a higher level of U.S. output and a higher U.S. price level.c.a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level.d.a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a higher U.S. price level.Y1LRASAS2AS1ADP1P2Y2ABYP2.The shift of the short-run aggregate-supply curve from AS1to AS2a.could be caused by an outbreak of war in the Middle East....
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This note was uploaded on 12/28/2010 for the course ECON 004 at Pennsylvania State University, University Park.

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Practice_Qs_AD_AS_Monetary_Policy-2 - AD-AS; Monetary...

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