... reserved 16- 17 Short Run Equilibrium and the Exchange Rate: DD Schedule (cont.) DD schedule • shows combinations of output and the exchange rate at which the output market is in short run equilibrium... reserved 16- 11 Determinants of Aggregate Demand (cont.) • Determinants of aggregate demand include:  Real exchange rate: an increase in the real exchange rate increases the current account, and therefore... or imperfect information about market demand • This chapter builds on the short run and long models of exchange rates to explain how output is related to exchange rates in the short run  macroeconomic