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After a Negative Demand Shock, the "Yes - Markets Self-Adjust

Question 284

Multiple Choice

After a negative demand shock, the "Yes - Markets Self-Adjust" camp argues that all of the following will happen except,


A) export spending increases due to a lower Canadian price level.
B) interest rates fall, increasing business investment spending.
C) wages rise due to excess demand for labour.
D) import spending decreases due to a lower Canadian price level.
E) wages fall due to excess supply of labour.

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