If the Short-Run Aggregate Supply Curve Is Assumed to Be

question 14

Multiple Choice

If the short-run aggregate supply curve is assumed to be horizontal and international capital flows are infinitely elastic, then the big, comprehensive model in the appendix to Chapter 14 corresponds to which of the following special cases?

• A)classical closed economy
• B)aggregate demand and aggregate supply
• C)IS-LM model
• D)Mundell-Fleming model with floating exchange rate

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