Theoretically, when a currency depreciates one can predict that
a. the price level will rise and real GDP will rise.
b. the price level will fall and real GDP will fall.
c. real GDP will rise, but price change is not predictable.
d. the price level will rise, but real GDP change is not predictable.
d
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Income taxes create a wedge between the wage rate paid by ________ and received by workers and thereby ________ employment and ________ potential GDP
A) firms; raise; decrease B) households; lower; decrease C) firms; lower; decrease D) firms; lower; increase E) firms; raise; increase
A free market fails when
A) firms that produce goods which create positive externalities go bankrupt. B) firms that produce goods which create negative externalities earn high profits. C) there is an external effect in either production, consumption, or both. D) there is government intervention.