If the nominal interest rate is 5 percent and there is a deflation rate of 3 percent, what is the real interest rate?

According to the interest rate effect, a decrease in the price level will

A) decrease the real value of money balances, which causes total planned real expenditures to increase. B) cause interest rates to fall, which generates an increase in borrowing, so that total planned real expenditures increase. C) lead to a decrease in net exports, which causes total planned real expenditures to decrease. D) increase the real value of money balances, which causes interest rates to increase, thereby reducing total planned expenditures.

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.