Problem Set 60-1

FORUM

1. Identify whether the AA-curve, the DD-curve, or neither curve shifts in response to each of the following changes. Indicate whether the curve shifts up, down, left or right. Possible answers are, AA up, AA down, DD right, DD left, or neither.
 

A. decrease in government transfer payments
B. decrease in the foreign price level
C. increase in foreign interest rates
D. decrease in the expected exchange rate Ee$/£.
E. decrease in US GNP
F. decrease in the US money supply