In the Short-Run, Any Rise in the Real Exchange Rate

question 100

Multiple Choice

In the short-run, any rise in the real exchange rate, EP /P, will cause

• A) an upward shift in the aggregate demand function and a reduction in output.
• B) an upward shift in the aggregate demand function and an expansion of output.
• C) a downward shift in the aggregate demand function and an expansion of output.
• D) an downward shift in the aggregate demand function and a reduction in output.
• E) an upward shift in the aggregate demand function but leaves output intact.

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Definitions:

Auditory

Related to the sense of hearing or the organs and structures thereof.

Olfactory

Pertaining to the sense of smell.

Visual

Relating to seeing or to the perception of things by the sense of sight.

Tactile

Relating to the sense of touch or the sensation caused by objects coming into contact with the skin.