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Suppose the nation of Pecunia had a current account
What happened to Pecunia’s net foreign assets in 2013?The CA deficit indicated net foreign assets decreased by $1 billion.How would the purchase of Pecunian assets by foreign cent...
In the short run, a temporary increase in the money supply
A.shifts the AA curve to the right, increases output, and depreciates the currency.B.shifts the AA curve to the left, increases output, and depreciates theC.shifts the AA curve to ...
Which of the following statements is the most accurate?
A.A rise in the interest rate offered by dollar deposits causes the dollar to appreciate.B.A rise in the interest rate offered by dollar deposits causes the dollar to depreciate.C....
The monetary approach makes the general prediction that
A.The exchange rate, which is the relative price of American and European money, is fully determined in the long run by the relative supplies of those monies.B.The exchange rate, w...
“Although the price levels appear to display short-run
“Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead ...
Explain how the AA schedule is derived.
Answer: For a fixed real money supply, an increase in output leads to an increase in the domestic interest rate. In the foreign exchange market, an increase in the domestic interes...
Suppose Russia’s inflation rate is 200%
Suppose Russia’s inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swiss f...
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In the short run, with prices fixed,
In the short run, with prices fixed, how would an increase in government spending affect the DD-AA schedule?A.It will increase output and appreciate theB.It will increase output an...
An appreciation of a country’s currency
A.decreases the relative price of its exports and lowers the relative price of its imports.B.raises the relative price of its exports and raises the relative price of its importsC....
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Which of the following statements is the most accurate?
A.Relative PPP is not a reasonable approximation to theB.Relative PPP is sometimes a reasonable approximation to the data but usually performsC.Relative PPP is sometimes a reasonab...








