Under fixed exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is
A) the currency appreciates, and output falls.
B) the currency depreciates, and output falls.
C) the currency remains the same, and output decreases.
D) the currency depreciates, and output remains constant.
E) the currency appreciates, and output remains the same.
C
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If the Fed paid a lower interest rate to banks on their reserves at the Fed, the money supply would tend to rise
a. True b. False Indicate whether the statement is true or false
Assume the generic production function Q = f (K,L) displays both decreasing returns to capital (K) and decreasing returns to labor (L). Then
A. this production function may display increasing returns to scale. B. this production function will certainly display constant returns to scale. C. this production function will certainly display decreasing returns to scale. D. this production function will certainly display increasing returns to scale.