How can long run values in the real exchange rate change?
What will be an ideal response?
An increase in world relative demand for U.S. output causes a long-run real appreciation of the dollar against the euro (a fall in real dollar/euro exchange rate).
A relative expansion of U.S. output causes a long-run real depreciation of the dollar against the euro (a rise in real dollar/euro exchange rate).
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As long as an additional worker hired by a firm produces
A) more output than the real wage rate, the firm will hire that worker. B) more output than the real wage rate, the firm will not hire that worker. C) less output than the real wage rate, the firm will hire that worker. D) some output, the firm will hire that worker. E) more output than the nominal wage rate, the firm will hire that worker.
Describe how a sudden stop leads to a financial crisis
What will be an ideal response?