Figure 24-1 -Refer to Figure 24-1.Ceteris Paribus,an Increase in the Value of the Value

question 233

Multiple Choice

Figure 24-1
-Refer to Figure 24-1.Ceteris paribus,an increase in the value of the domestic currency relative to foreign currencies would be represented by a movement from

• A)AD1 to AD2.
• B)AD2 to AD1.
• C)point A to point B.
• D)point B to point A.

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Definitions:

Final Goods

Products or goods that are ready for sale to the end consumer and will not be transformed into another product.

Economy

The system by which goods and services are produced, distributed, and consumed in a society.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, removing the effects of inflation to compare one period with another.

Real GDP

Inflation-adjusted GDP, which presents a truer picture of an economy's magnitude and growth patterns over time.