In the monetary small open-economy model with a fixed exchange rate, a devaluation of the domestic currency in the absence of any other shocks
A) increases the current account surplus and has no effect on the domestic money supply.
B) decreases the current account surplus and has no effect on the domestic money supply.
C) increases the domestic money supply and has no effect on the current account surplus.
D) decreases the domestic money supply and has no effect on the current account surplus.
D
You might also like to view...
Some examples of standardized products include
a. furniture products, such as chairs and tables b. clothing products, such as shirts and jeans c. agricultural products, such as eggs and milk d. electronic products, such as DVD players and TVs
During the year, suppose a country's total purchases of newly produced capital goods is $2,000 billion, issues $1,600 billion of stock certificates, and has $500 billion in depreciation. Gross investment in this country equals
A) $2,500 billion. B) $2,000 billion. C) $2,100 billion. D) $4,100 billion. E) $3,600 billion.