What are the differences and similarities between a depreciation and devaluation of a currency?
What will be an ideal response?
A depreciation of a currency takes place due to the mechanics of supply and demand and belongs to a flexible or floating exchange rate system. On the other hand, devaluation is due to the intervention by the monetary authority of a central bank of a country following a fixed exchange rate system. They both result in a lower value of the currency.
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When competing firms set prices with attention to the prices set by their competitors, the demand curve faced by each firm
A) becomes indeterminate. B) becomes less elastic. C) becomes more elastic. D) shifts toward the northeast. E) shifts toward the southwest.
The slope of an isocost line determines the marginal rate of substitution
Indicate whether the statement is true or false