Which of the following is an argument of opponents of devaluations?
A) Devaluations cause relatively slow adjustments.
B) Participants in foreign exchange markets have a short memory: if the expected devaluation doesn't occur within a short time-period, they will stop expecting it.
C) A devaluation causes a nation with fixed exchange rates to lose credibility in the medium run, driving its interest rate higher.
D) all of the above
E) none of the above
C
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The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) limited by the demand.
Disinflation occurs when:
A. the price level is falling. B. investment plans exceed saving. C. a speculative investment "bubble" is bursting. D. the inflation rate is declining.