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Unformatted text preview: a decrease in taxes in England as the money supply fell in the UK
b. the domestic price level would rise in England as gold flowed into the country because of a balance of trade
c. the domestic money supply would fall in the England as gold flowed out of the country as the result of a trade
d. there would be an increase in saving in England and this would push up interest rates and lead to increases in US
imports from the UK
take it in two parts - first think about what happens if prices rise in the UK - then UK goods are more expensive so
people buy less of them - so gold flows into the UK are lower - and this drives down prices
10. Based on the nature of the economy reflected in this ASAD diagram, which of the following would be the preferred
policy for expanding the level of output in the economy?
a. an increase in the price of oil
b. increasing yearly immigration
c. an increase in income tax rates
d. a cut in inefficient government spending this must be something to increase AS - and it would be immigration
11. "When the panic of 1929 suddenly wiped out the whole value of many stocks and sharply reduced the values of
others, a great number of people who had though themselves rich, or at least well-off, found themselves with much less
than they had thought they had, or with nothing at all. By [the] milli...
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