If the economy starts in long-run equilibrium, a permanent fiscal expansion will cause
A) an increase in exchange rate, E.
B) a decrease in exchange rate, E.
C) an increase in output, Y.
D) a decrease in output, Y.
E) shifting of the AA curve up and to the right.

Question

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The Answer of If the economy starts in long-run equilibrium, a permanent fiscal expansion will cause
A) an increase in exchange rate, E.
B) a decrease in exchange rate, E.
C) an increase in output, Y.
D) a decrease in output, Y.
E) shifting of the AA curve up and to the right.

If the Economy Starts in Long-Run Equilibrium, a Permanent Fiscal