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If the Price of Imported Inputs Suddenly Rises

Question 19

Multiple Choice

If the price of imported inputs suddenly rises,


A) we buy less, so aggregate demand falls
B) we pay more for the same quantity, so aggregate demand rises
C) we substitute domestic sources of inputs, so aggregate demand rises
D) our ability to produce is reduced, so aggregate supply shifts inward
E) GDP in unaffected because imports are netted out of gross domestic product

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