Consider a Simple Macro Model with Demand-Determined Output

question 53

Multiple Choice

Consider a simple macro model with demand-determined output.An exogenous increase in the domestic price level will

• A)shift both the net export function and the AE curve upward.
• B)shift the net export function upward and the AE curve downward.
• C)shift both the net export function and the AE curve downward.
• D)shift the net export function downward and the AE curve upward.
• E)pivot the net export function and the AE curve upward.

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Definitions:

Transfer Payments

Payments made by governments to individuals or other government entities without receiving any goods or services in return, such as welfare benefits or subsidies.

Uncontrollable Budget Items

Government expenditures that are considered mandatory and not subject to annual review or adjustment by Congress, such as interest payments on national debt.

Congressional Committee Framework

The organizational system of committees within the United States Congress, designed to facilitate detailed examination and discussion of legislative proposals.

Budget Process

A systematic method used by organizations or governments to allocate resources, assess revenues, and determine expenditures for a specific time period.