Answer to Question #15167 in Economics of Enterprise for Babu

Question

Consider a macroeconomy was initially at equilibrium level of real GDP. Using an aggregate demand and aggregate supply diagram or model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:

An appreciation in the foreign exchange rate value of the economy’s currency.
(e) A fall in real estate prices in the capital cities of the country (hint: think of the effect upon one’s wealth level)
(f) The country main exports fall in price while the goods the country imports from abroad rise in price.

Answer 1

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