Suppose That a Permanent Reduction in Export Demand Were Matched

question 55

Multiple Choice

Suppose that a permanent reduction in export demand were matched exactly in its first year only by increasing government spending. Compared with the long-term outcome that you would expect in the absence of this policy adjustment, you would now expect to see

• A) the same downward price adjustment to accommodate lower demand postponed by one year.
• B) the same downward price adjustment to accommodate lower demand operating along the same time schedule that was unaffected by neutral fiscal policy.
• C) the same upward price adjustment to accommodate lower demand postponed one year.
• D) the same upward price adjustment operating along the same time schedule.
• E) none of the above.

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Definitions:

Flash Memory

A type of non-volatile storage that can be electronically erased and reprogrammed, used in USB drives, SSDs, and other digital devices.

CPU

Central Processing Unit, the primary component of a computer responsible for interpreting and executing most of the commands from the computer's other hardware and software.

Memory Modules

Physical components that store digital information temporarily or permanently, such as RAM sticks or SSDs.

Expansion Cards

Interface devices that can be added to a computer to provide additional functions such as improved video, sound, or network capabilities.