In the Two-Period SOE Model with Production, If the SOE

question 59

Multiple Choice

In the two-period SOE model with production, if the SOE closes off trade with the rest of the world

• A)this makes output go up only if the government reduces spending.
• B)this makes output go up if the real interest rate goes down.
• C)this makes output go up if the real interest rate goes up.
• D)this must make output go down.
• E)this must make investment go up.

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