In the Long- Run Equilibrium, a Fall in the Exchange

question 12

Multiple Choice

In the long- run equilibrium, a fall in the exchange rate that increases exports leads to

• A) an increase in the equilibrium price level, but no change in equilibrium real GDP.
• B) no change in the equilibrium price level, but an increase in equilibrium real GDP.
• C) an increase in the equilibrium price level and a decrease in equilibrium real GDP.
• D) an increase in the equilibrium price level and an increase in equilibrium real GDP.

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Definitions:

Laboratory Experiments

Controlled tests carried out in a lab environment to study the effects of variables in a scientific study.

Species

A group of living organisms consisting of similar individuals capable of exchanging genes or interbreeding.

Habitat

The natural environment in which a particular species of plant or animal lives, characterized by both physical and biological features.

Lithosphere

The rigid outer layer of the Earth, composed of the crust and the upper part of the mantle.