In the Short Run, with Prices Fixed, How Would an Increase

question 1

Multiple Choice

In the short run, with prices fixed, how would an increase in government spending affect the DD-AA equilibrium?

• A) It will increase output and appreciate the currency.
• B) It will increase output and depreciate the currency.
• C) It will decrease output and appreciate the currency.
• D) It will decrease output and depreciate the currency.
• E) It will increase output and have no effect on the currency.

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Definitions:

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