In the Short Run, Any Rise in the Real Exchange

question 37

Multiple Choice

In the short run, any rise in the real exchange rate, EP/P*, will cause

• A) an upward shift in the aggregate demand function and a reduction in output.
• B) an upward shift in the aggregate demand function and an expansion of output.
• C) a downward shift in the aggregate demand function and an expansion of output.
• D) an downward shift in the aggregate demand function and a reduction in output.
• E) an upward shift in the aggregate demand function but leaves output intact.

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Definitions:

Party

A social gathering of invited guests, typically involving eating, drinking, entertainment, and sometimes specific celebrations.

Proletariat

The class of workers in capitalist societies who do not own the means of production and whose main source of income is the sale of their labor power.

Class

A category or grouping of people in society often defined by economic, social, or professional status.

Ethnomethodology

A sociological perspective that examines the methods people use to understand and produce the social order in everyday situations.