How is the AA schedule derived?
A) The AA schedule has a positive slope because an increase in output leads to a depreciation of the currency.
B) The AA schedule has a negative slope because an increase in output leads to a decrease in the domestic interest rate.
C) The AA schedule has a negative slope because an increase in output leads to an increase in the domestic interest rate and a domestic currency appreciation.
D) The AA schedule has a positive slope because an increase in the money supply leads to an increase in the domestic interest rate.
E) The AA schedule has a positive slope because a decrease in output leads to a depreciation of the currency.
C
You might also like to view...
Suppose that an individual has chosen not to work. Then a change in the wage rate:
A. creates a substitution effect, but no income effect. B. creates an income effect, but no substitution effect. C. creates both and income and substitution effect. D. creates neither an income effect nor a substitution effect.
The official definition of poverty is based on a comparison of cash and in-kind benefits with family size.
Answer the following statement true (T) or false (F)
An investor who bases the decision to buy an asset solely on the expected return of an asset is considered to be:
A) risk loving B) risk averse C) risk neutral D) risk avoiding
A consumer who buys any amount of a good will realize a positive consumer’s surplus from that good.
Answer the following statement true (T) or false (F)