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The AD-AS Model Predicts That,in a Country Whose Net Exports

question 102

Multiple Choice

The AD-AS model predicts that,in a country whose net exports of oil are zero,a sudden decrease in the price of oil will shift the ___________ curve ___________,resulting in a ___________ price level and ___________ output level in the short run.


Definitions:

International Fisher Effect

A theory stating that the difference in nominal interest rates between two countries is equal to the expected change in exchange rates.

Expected Percentage Change

An estimation of the degree to which a specific variable such as price, cost, or investment value is anticipated to vary over a certain period.

Interest Rates

The percentage of a loan that is applied as interest for the borrower, usually shown as an annual percentage of the remaining loan amount.

Uncovered Interest Parity

A theory in economics that posits the difference in interest rates across two countries will match the anticipated shift in exchange rates between their currencies.

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