Suppose the Canadian economy is in long-run equilibrium. Then suppose the value of the Canadian dollarincreases. At the same time, people in Canada revise their expectations so that the expected price level falls. Whatwould we expect will happen in the short run?Select one:a. Real GDP will fall, and the price level might rise, fall, or stay the same.O b. The price level will fall, and real GDP might rise, fall, or stay the same.C. Real GDP will rise, and the price level might rise, fall, or stay the same.d. The price level will rise, and real GDP might rise, fall, or stay the same.

Due to increase in the value of CAD, the purchasing power of CAD would in turn increase and falling…

Suppose the Canadian economy is in long-run equilibrium. Then suppose the value of the Canadian dollar increases. At the same time, people in Canada revise their expectations so that the expected price level falls. What would we expect will happen in the short run? Select one: O a. Real GDP will fall, and the price level might rise, fall, or stay the same. b. The price level will fall, and real GDP might rise, fallI, or stay the same. C. Real GDP will rise, and the price level might rise, fall, or stay the same. O d. The price level will rise, and real GDP might rise, fall, or stay the same.

Suppose the Canadian economy is in long-run equilibrium. Then suppose the value of the Canadian dollar increases. At the same time, people in Canada revise their expectations so that the expected price level falls. What would we expect will happen in the short run? Select one: O a. Real GDP will fall, and the price level might rise, fall, or stay the same. b. The price level will fall, and real GDP might rise, fallI, or stay the same. C. Real GDP will rise, and the price level might rise, fall, or stay the same. O d. The price level will rise, and real GDP might rise, fall, or stay the same.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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