Multiple Choice
To simplify the analysis of demand shocks in an open, two-economy, short-run model, we assume all of the following, EXCEPT:
A) fixed prices and wages.
B) levels of government spending and taxes; foreign GDP and foreign rates of interest are given.
C) no net unilateral transfers or foreign factor income.
D) foreign GDP and foreign rates of interest are constant.
Correct Answer:
Verified
Correct Answer:
Verified
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