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

question 44

Multiple Choice

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

• A) classical open economy
• B) IS-LM model
• C) Mundell-Fleming model with floating exchange rate
• D) Mundell-Fleming model with fixed exchange rate

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Definitions:

Estimated Delivery Date

The calculated date on which a baby is expected to be born, often determined by the date of the last menstrual period or an ultrasound.

Last Menstrual Period

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A medical procedure involving the use of a cystoscope to examine the interior of the bladder and urethra.

Bladder

A hollow organ in the lower abdomen that stores urine from the kidneys before it is excreted.