1. (a) Which graph is the starting point for derivation of the DD curve? (b) What does...
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2. Suppose there is a shift in net exports away from domestic goods relative to foreign goods. How will this affect the aggregate demand [AD or AE in the online manual]? What is the effect on the DD curve?
3. What distinguishes a temporary policy change from a permanent one in the AA-DD model?
4. If there is a change in monetary policy, and no change in fiscal policy, which curve in the AA-DD diagram will shift?
5. (a) What is absolute purchasing power parity? (b) What is relative purchasing power parity?
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1 a Which graph is the starting point for the derivation of the DD curve The starting point of deriving DD schedule is started with a diagram that helps to illustrate equilibrium in the goods market F...View the full answer
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