Which of the Following Is Not a Result of a Temporary

question 116

Multiple Choice

Which of the following is not a result of a temporary fall in foreign demand on one country's exports under floating exchange rate?

• A) The DD curve shifts to the left due to reduction of aggregate demand.
• B) The AA curve shifts downwards due to reduction of money supply.
• C) a fall in aggregate output
• D) depreciation in home country's currency
• E) a fall in the home interest rate

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Definitions:

Income Elasticity

A measure of how much the quantity demanded of a good changes in response to a change in consumers' income.

Peanut Butter

A food paste or spread made from ground, dry-roasted peanuts, often used as a sandwich filling or ingredient in various recipes.

Income Elasticity

Measures how the quantity demanded of a good responds to a change in consumer income.

Normal Good

An item for which demand increases as the income of consumers increases, showing a direct relationship between income and demand.