In the Short Run, Any Rise in the Real Exchange

question 22

Multiple Choice

In the short run, any rise in the real exchange rate, EP /P, will cause

• A) an upward shift in the aggregate demand function and a reduction in output.
• B) an upward shift in the aggregate demand function and an expansion of output.
• C) a downward shift in the aggregate demand function and an expansion of output.
• D) an downward shift in the aggregate demand function and a reduction in output.
• E) an upward shift in the aggregate demand function but leaves output intact.

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A term or phrase originating from the Greek language, which has contributed significantly to the vocabulary of various languages, including English.