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    Classical AS curves

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    10. Say all economies of the world possess classical AS curves. In such a world, we would predict:

    A. Higher levels of imports by country 1 that would raise the price level in country 2, but not impact domestic output
    B. Interest rates would be dependent on activities in the AS market
    C. Higher levels of exports by country 1 to country 2 would raise domestic prices in country 2
    D. Both a and c.

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    An aggregate supply curve--a graphical representation of the relation between real production and the price level--that reflects the ...

    Solution Summary

    Response discusses the classical AS curves.