The IS curve is Y = 20 - 1.5r, and the aggregate demand curve is ...

[maychende]

The IS curve is Y = 20 - 1.5r, and the aggregate demand curve is Y = 15.5 - 0.3. When the inflation rate is 3 percent, output is ________.
 
  A) 20
  B) 14.6
  C) 9.5
  D) 3.6
  E) none of the above

Question 2

An increase in autonomous investment in a small open economy will cause ________.
 
  A) a trade surplus to shrink
  B) a trade deficit to increase
  C) lower net capital outflows
  D) all of the above
  E) none of the above

[millet]

Answer to Question 1

B

Answer to Question 2

D