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A Sudden Influx of Dollars from Foreign Sources Can Be

Question 43

Multiple Choice

A sudden influx of dollars from foreign sources can be equivalent to a sudden and unexpected increase in the money supply. The result of such an influx therefore could be


A) no change in the domestic economy because the dollars would still be under the control of foreign nationals.
B) a shift in the aggregate demand curve to the left as consumption and investment expenditure declined.
C) a shift in the aggregate demand curve to the right caused by an increase in the U.S. price level.
D) a sudden reduction in potential GDP that would reduce actual GDP and increase interest rates.
E) a shift in the aggregate demand curve to the right as consumption and investment expenditure increase.

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