Consider a Simple Macro Model with Demand-Determined Output

question 53

Multiple Choice

Consider a simple macro model with demand-determined output.An exogenous increase in the domestic price level will

• A)shift both the net export function and the AE curve upward.
• B)shift the net export function upward and the AE curve downward.
• C)shift both the net export function and the AE curve downward.
• D)shift the net export function downward and the AE curve upward.
• E)pivot the net export function and the AE curve upward.

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Definitions:

Perpetuity

A financial instrument or investment that generates a constant stream of cash flows with no end date.

Annuity Stream

A sequence of payments made at equal intervals, such as monthly or annually.

Payments Occur

Indicates the instances or periods at which monetary transactions or installments are made.

Perpetuities

Financial instruments that provide an endless stream of equal payments with no expiration date.