If the Short-Run Aggregate Supply Curve Is Assumed to Be

Multiple Choice

If the short-run aggregate supply curve is assumed to be horizontal and money demand is proportional to income, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases?

A) classical closed economy
B) aggregate demand and aggregate supply
C) IS-LM model
D) Mundell-Fleming model with floating exchange rate