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People Expect That the El Nino Effect Will Cause Drought

Question 3

Multiple Choice

People expect that the El Nino effect will cause drought in Australia in coming years. If most Australian firms expect that their profits will fall during the next five years, Australia's ________ this year.


A) short- run aggregate supply will increase
B) long- run aggregate supply will increase
C) aggregate demand will increase
D) aggregate demand will decrease

Correct Answer:

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