U.S. net exports fall due to recessions in foreign countries. A. According to the aggregate demand and supply model, what happens to the price level and output in the short run? B. According to the short-run Phillips curve what happens to inflation and unemployment in the short run? C. If the Fed wanted to reverse the effects of this shock on output, what should it do?
A. The price level and output both fall.
B. The inflation rate falls and unemployment rises.
C. Increase the growth rate of the money supply.
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A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
How are the domestic sellers and buyers of a good affected if a country starts importing the good?
What will be an ideal response?
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What will be an ideal response?
The GDP deflator is a broader measure of the price level than the CPI because
A) it covers sales tax. B) it covers rents. C) it covers investment. D) it factors out fluctuations in seasonal items.