(8 points). For each of the below say if AD rises or falls and which component of...
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Question:
(8 points). For each of the below say if AD rises or falls and which component of AD is changing.
a) US relative prices fall relative to Indian prices (2 points.)
b) The exchange rate between the dollar and the Euro rises (2 points.
c) Interest rates increase (2 points.)
d) Homeowners wealth increases as their home values increase in the middle of a housing market bubble (2 points)
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