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Author Question: Assume the output market adjusts more rapidly than the asset market. A point of disequilibrium that ... (Read 336 times)

a0266361136

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on: Jun 30, 2018
Assume the output market adjusts more rapidly than the asset market. A point of disequilibrium that is below both AA and DD will therefore initially result in
 
  A) an increase in output.
  B) a decrease in output.
  C) a contraction of the money supply.
  D) a depreciation of the home currency.
  E) an appreciation of the home currency.

Question 2

What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets?
 
  What will be an ideal response?


Yixagurpuldink

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Reply #1 on: Jun 30, 2018
Answer to Question 1

B

Answer to Question 2

Will increase due to fear that foreign deposits in the U.S. will be frozen unless coordinated efforts by all countries.


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