An Autonomous Short-Term Capital Outflow Under Flexible Exchange Rates Causes

question 3

Multiple Choice

An autonomous short-term capital outflow under flexible exchange rates causes the nation's aggregate demand curve to

• A)shift to the right
• B)shift to the left
• C)remain unchanged
• D)any of the above

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Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the actual value of goods and services produced over a specific period.

Equilibrium

A state in economics where supply equals demand, resulting in a stable market condition where there is no tendency for change.

Equilibrium Level

The state in an economy or a market where supply equals demand, and there is no tendency for change until an external force is applied.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced in a country.