Under the Bretton Woods system, countries experiencing large and persistent current account deficits were obliged to devalue their currencies and/or take measures to cut their deficits by contracting their economies.

Why is the nominal interest rate the opportunity cost of holding money?

What will be an ideal response?

The slope of an isoquant tells us

A) how much output increases when both inputs are increased. B) the increase in MPL when capital increases. C) the decrease in capital necessary to keep output constant when labor increases by one unit. D) the decrease in capital necessary to keep MPL constant when labor increases by one unit.