If the Economy's AS Curve Is Vertical,the Multiplier in the AD/AS

question 25

Multiple Choice

If the economy's AS curve is vertical,the multiplier in the AD/AS model is

• A)infinitely large.
• B)equal to the simple multiplier.
• C)smaller than the simple multiplier.
• D)zero.
• E)negative.

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Definitions:

Exchange Rate

The exchange rate is the price at which one currency can be exchanged for another currency, affecting international trade and investments by determining how much one country's currency is worth in another's.

Domestic Currency

The currency that is legal tender in a country and used for domestic transactions.

Overvalued Currency

A currency that is traded at a price higher than its intrinsic value, often due to government intervention or speculative demand.

Manufacturing-Dependent

Describes economies or regions that primarily rely on the manufacturing sector for economic growth and employment.