This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: In the short run, with prices fixed, how would an increase in government spending affect the DD-AA ... (Read 70 times)

fahad

  • Hero Member
  • *****
  • Posts: 570
on: Jun 30, 2018
In the short run, with prices fixed, how would an increase in government spending affect the DD-AA equilibrium?
 
  A) It will increase output and appreciate the currency.
  B) It will increase output and depreciate the currency.
  C) It will decrease output and appreciate the currency.
  D) It will decrease output and depreciate the currency.
  E) It will increase output and have no effect on the currency.

Question 2

Refer to above figure. Would you expect to find that the real wages become equalized in both countries? Explain the reason for any differences you note.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ju

  • Sr. Member
  • ****
  • Posts: 325
Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

We would expect that one single relative wage will be established for both countries. This happens because the two countries do not differ in relative factor availability by much, and hence a zone of overlap exists which allows for this result.


fahad

  • Member
  • Posts: 570
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

steff9894

  • Member
  • Posts: 337
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

Increased intake of vitamin D has been shown to reduce fractures up to 25% in older people.

Did you know?

Carbamazepine can interfere with the results of home pregnancy tests. If you are taking carbamazepine, do not try to test for pregnancy at home.

Changes in Synaptic Density From Birth to Age 2 Synaptic connections increase throughout the first Changes in Synaptic Density From Birth to Age 2 Synaptic connections increase throughout the first
The world has been horrified recently at a U.S. Congress so polarized and paralyzed that it cannot p The world has been horrified recently at a U.S. Congress so polarized and paralyzed that it cannot p
The Head Start program was designed to increase the school readiness of low-income children. The Head Start program was designed to increase the school readiness of low-income children.
Hormones acting through the brain help regulate metabolism and short- and long-term appetite. Hormones acting through the brain help regulate metabolism and short- and long-term appetite.
Compression used to increase circulation when the athlete is clothed. Compression used to increase circulation when the athlete is clothed.
Government in America: People, Politics, and Policy, AP Government in America: People, Politics, and Policy, AP
Video: Rods and Cones Animation

For a complete list of videos, visit our video library