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Starting from an Equilibrium in Both Markets,an Increase in Absorption

Question 1

Multiple Choice

Starting from an equilibrium in both markets,an increase in absorption will cause:


A) the supply curve to shift to the left for both tradables (T) and nontradables (N) .
B) the demand curve to shift to the right for both T and N.
C) the demand curve to shift to the right for N and to the left for T.
D) no shift in the curves, but the economy moves to a position of inflation and external surplus.

Correct Answer:

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