Ans) Decrease ; depreciate
An increase in taxes will give less money in hands of consumer and hence there will be less demand as a result output will decrease. Further Decrease in output lowers the transaction demand for real moneyholders, which inturn decreases the home interest rate. This will result in depreciation of domestic currency
In the short run, if taxes rise, output will_and the exchange rate will increase; appreciate increase;...
A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? Only with increasing output Only with increasing the current account balance No, not with either goal Yes, with both goals In the short run, if taxes rise, output will_and the exchange rate will increase; appreciate increase; depreciate decrease; appreciate decrease; depreciate With a fixed...
19 20
QUESTION 19 A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? O Only with increasing output O Only with increasing the current account balance O No, not with either goal Yes, with both goals QUESTION 20 and output will In the short run, if the central bank decreases the money supply,...
11 and 12
QUESTION 11 If Foreign decreases its interest rate, Home's output will ____ and currency will O increase; appreciate O decrease; appreciate O decrease; depreciate O increase; depreciate QUESTION 12 In the short run, if there is a tax cut, output will and the exchange rate will O decrease; appreciate O increase; appreciate O increase; depreciate decrease; depreciate ALECTION 13
appreciate/depreciate
appreciate/depreciate
increase/decrease
increase/decrease
appreciate/depreciate
The following questions focus on the exchange rate between the euro and the Danish krone. Assume the exchange rate is flexible. The exchange rate is defined as the number of euros you must pay for one krone. Suppose an economic downturn in Denmark causes Danish incomes to decrease, while European incomes remain unchanged. Shift the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner if all...
In the short-run an increase in the costs of production makes A. output and prices rise. B. output rise and prices fall. C. output fall and prices rise. D. output and prices fall.
5 and 6
QUESTION 5 In the long run, with variable real exchange rates, if American goods become less attractive relative to European goods, the dollar will experience a real and a nominal depreciation; depreciation O appreciation; appreciation O depreciation; appreciation O appreciation, depreciation QUESTION 6 and output to A short-run increase in government spending causes the currency to depreciate; increase appreciate; increase appreciate; decrease O depreciate; decrease QUESTION 7 it to save and submit. Click Save All Answers to...
QUESTION 20 and output will In the short run, if the central bank decreases the money supply, the currency will O A. appreciate; rise B. depreciate; fall OC. appreciate; fall D. depreciate; rise Click Save and Submit to save and submit. Click Save All Answers to save all answers. MacBook Pro Search or type URL
With a fixed exchange rate, what would increase output in the short run? Contractionary fiscal policy Contractionary monetary policy Expansionary fiscal policy Expansionary monetary policy
1. What is the short-run effect on the exchange rate of an increase in domestic real GNP, given expectations about future exchange rates? A.Money demand increases, the domestic interest rate increases, and the domestic currency depreciates. B.Money demand increases, the domestic interest rate increases, and the domestic currency appreciates. C.Money demand decreases, the domestic interest rate decreases, and the domestic currency appreciates. D.Money demand decreases, the domestic interest rate decreases, and the domestic currency depreciates. 2. In our discussion of...
With a floating exchange rate, contractionary monetary policy, as the U.S. pursued in the early 1980s, causes the currency to ____ and output to ____. A) appreciate; rise B) appreciate; fall C) depreciate; rise D) depreciate; fall