If the Short-Run Aggregate Supply Curve Is Assumed to Be

question 90

Multiple Choice

If the short-run aggregate supply curve is assumed to be horizontal and international capital flows are infinitely elastic, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases?

• A) classical closed economy
• B) aggregate demand and aggregate supply
• C) IS-LM model
• D) Mundell-Fleming model with floating exchange rate

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