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Q. Determination of variables in AS-AD model?
Once Y and P are determined, all other endogenous variables would be determined as well. Interest rate is determined by money market diagram and components of GDP are either exogenous or they rely on R or Y. W is constant and as P is determined, so is real wage. Then L and unemployment rate is determined as well.
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In the heckscherohlin model, a decrease in the factors of production required to produce rice and beans would: a. shift the production possibilities frontier for rice and beans
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