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Which of the following is a possible effect of an increase in the price level in an economy
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- A contractionary monetary policy lowers equilibrium real GDP in the short run, by increasing the interest rate. In an open economy, the net export effectA.has no effect on real GDP since changes in exports and imports cancel each other.B.reinforces the effect of a contractionary monetary policy since the increase in the interest rate, increases the value of dollar, lowers U.S. imports and causes the real GDP to fall.C.reinforces the effect of a contractionary monetary policy since the increase in the interest rate, increases the value of dollar, lowers U.S. exports and causes the real GDP to fall.D.weakens the effect of a contractionary monetary policy since the increase in the interest rate, increases the value of dollar, increases U.S. exports and causes the real GDP to increase.
- What is value added and how is it calculated?Value added refers toA.the additional market value a firm gives to a product and is calculated as the difference between the sale price and the price of intermediate goods.B.the additional market value a firm gives to a product and is calculated as the difference between the total production cost and the price of intermediate goods.C.the profit a firm receives for its product and is calculated as the difference between total revenue and total cost.D.the profit a firm receives for its product and is calculated as the difference between the sale price and the price of intermediate goods.
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