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.
Correct Answer:
Verified
Q38: In setting prices, firms pay particular attention
Q39: Measured as a percentage of potential GDP,
Q40: When determining algebraically the current level of
Q41: Suppose the demand for money were to
Q42: According to the complete model, fiscal and
Q44: Suppose that an economy suffers a doubling
Q45: Aggregate demand has fallen so that GDP
Q46: In the long run, you would expect
Q47: From the perspective of a policy maker,
Q48: A shock to aggregate demand can be
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents