Currency devaluations help suppliers because they make exports ________ expensive in the _____________ currency
a. Less; domestic
b. Less; foreign
c. More; domestic
d. More; foreign
b
You might also like to view...
A situation in which a single individual can provide a private good is known as the volunteer's dilemma
Indicate whether the statement is true or false
Nonunion wages should be modeled as
A) sticky, because they imitate union wages rather closely. B) sticky, because their contracts cannot contain COLA clauses. C) perfectly flexible, because wage contracts are illegal outside of unions. D) perfectly flexible, because workers willing to take the risks of full wage flexibility are precisely those workers who have rejected unionization.
Sticky prices are a direct result of the kinked demand curve.
Answer the following statement true (T) or false (F)
Figure 16-2
Suppose that Figure 16-2 shows the effects of reducing the budget deficit by raising taxes. If authorities do not want real GDP to fall, monetary policy must
a.
become sufficiently more expansionary to restore the aggregate demand curve to D0D0.
b.
contract aggregate demand to be consistent with deficit-reducing fiscal policy.
c.
not lower interest rates and thwart the goal of a balanced budget.
d.
become more contractionary to lower the interest rate and spur investment.