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

question 102

Multiple Choice

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

• 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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