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*Consider the aggregate demand and supply model for a closed

economy where net exports are zero.


For the aggregate supply, in the short run, income and price level are:

A. directly related, but in the long-run, income is constant at full employment GDP.

B. indirectly related, but in the long-run, the price level is constant.

C. indirectly related, but in the long-run, income is constant at full employment GDP.

D. directly related, but in the long-run, the price level is constant.


*Please explain, thank you.


Aggregate demand consists of:

A. consumption, investment, and government spending. --> I think this one is correct since it's a closed economy.

B. consumption, government spending, and net exports.

C. consumption, investment, government spending, and net exports.

D. consumption and imports.


For the aggregate demand, income and the price level are:

A. inversely related. --> I think this one is correct

B. both falling.

C. both rising.

D. directly related.

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