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Figure 33-3 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) Panel a shows
Figure 33-3 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) Panel a shows a graph of a straight line, decreasing linearly, and a second straight line, increasing linearly. The following values are marked on the vertical axis, from lowest to highest. 3%, 4%, and 5%. 4% is on level with the point of intersection, or equilibrium point, of the two lines. 3% lies below the equilibrium point, and 5% lies above the equilibrium point. Panel b shows a graph of a straight line, decreasing linearly. Graph (c) Panel c shows a graph of a straight line, decreasing linearly, and a vertical line that extends from the horizontal axis. The vertical line intersects the decreasing line somewhere to the right of its middle point. Refer to Figure 33-3. Suppose that U.S. firms desire to purchase more equipment and build more factories and stores in the United States. The effects of this are illustrated by a. shifting the supply curve in panel a to the right and the supply curve in graph (c) to the right. b. shifting the supply curve in panel a to the right and the
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