A theory of aggregate economic fluctuations called real business cycle theory holds that
A) changes in the real money supply are the only demand shocks that affect the natural rate of output.
B) aggregate demand shocks do affect the natural rate of output.
C) aggregate supply shocks do affect the natural rate of output.
D) changes in net exports are the only demand shocks that affect the natural rate of output.
C
Economics
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Deficits financed by borrowed money lead to inflation, and in a fixed or crawling peg exchange rate system, this leads to the real exchange rate being undervalued
Indicate whether the statement is true or false
Economics
The interest parity condition indicates that the interest differential is equal to the
A) risk premium. B) forward premium. C) futures premium. D) arbitrage premium.
Economics