New Keynesian inflation dynamics can account for sluggish responses of

Firms in Thailand that had ________ while the baht was pegged to the dollar faced interest payments that were higher than they had planned once the Thai government abandoned the peg because the baht had been pegged ________ the equilibrium exchange

rate for the baht. A) borrowed dollars; above B) borrowed baht; above C) borrowed baht; below D) borrowed dollars; below

If inflation in the United States is higher than inflation in other countries, what will be the effect on net exports for the United States?

A) Net exports will decrease as U.S. imports decrease. B) Net exports will rise as U.S. imports decrease. C) Net exports will rise as U.S. exports increase. D) Net exports will decrease as U.S. exports decrease.