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Assume an economy has been operating at full employment levels of output and price level. A substantial depreciation of the U.S. dollar versus an index
Assume an economy has been operating at full employment levels of output and price level. A substantial depreciation of the U.S. dollar versus an index of foreign currencies would affect aggregate demand and equilibrium output in which ways?
Main question:
Will aggregate demand have an increase, decrease, or no change?
Will aggregate output have an increase, decrease, intermediate change, or no change?
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