The transmission mechanism alters the real gross domestic product through changes in the price level
a. True
b. False
Indicate whether the statement is true or false
False
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Whenever a nation's currency is expected to depreciate because of various market conditions, the following situation exists regarding its forward rate for another currency:
a. there is a forward discount from the spot rate by the rate of depreciation. b. there is a forward premium from the spot rate by the rate of depreciation. c. there is no difference between the spot and forward rates. d. there is no predictable relationship between the spot and forward rates
With crises caused by macroeconomic imbalances,
A) it is usually difficult to avoid a recession. B) austerity programs are not needed. C) expansionary policies can be used to correct the crisis. D) the money supply should be increased.