A depreciation of one's currency means that:
a. the country's exports will become more expensive.
b. it now requires less of this currency in exchange for one unit of another currency.
c. the country's imports will become less expensive.
d. it now requires more of this currency in exchange for one unit of another currency.
e. it now requires more units of other currencies in exchange for one unit of this currency.
d
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Suppose output is above the natural level of output. In a fixed exchange rate regime, explain the two ways the economy can return to the natural level of output
What will be an ideal response?
In an economy, the government wants to decrease aggregate demand by $48 billion at each price level to decrease real GDP and control demand-pull inflation. If the MPS is 0.25, then it could:
A. Increase taxes by $16 billion B. Increase taxes by $24 billion C. Decrease government spending by $10 billion D. Decrease government spending by $16 billion