The International Fisher Effect implies that the country with the higher interest rate should have lower inflation.

Which of the following is not a weakness of fiscal policy as a tool of economic stabilization? a. It is ineffective in dealing with stagflation

b. Its correct implementation depends on an accurate estimate of potential output. c. It is subject to lags. d. It affects only aggregate demand but does not have any impact on aggregate supply. e. Households may not respond to changes they perceive as permanent.

If the exchange rate for Micromania's micros to United States's dollars is 50 micros = $1, then micros have appreciated when the exchange rate becomes

a. 100 micros = $2 b. 100 micros = $1 c. 25 micros = $0.50 d. 25 micros = $0.25 e. 25 micros = $0.75