Refer to Figure 10.1. If the level of real GDP is initially Y2, firms will ________ production until equilibrium is reached at ________

If the domestic dollar return (home nominal interest rate) is 5%, and the foreign nominal interest rate is 3%, and there is no expected change in future exchange rates, then as the spot exchange rate depreciates:

a. the foreign return rises. b. the foreign return falls. c. the domestic return rises. d. the domestic return falls.

Why is time such an important determinant in the elasticity of supply? Is time also important in determining price elasticity of demand? Explain

What will be an ideal response?