When a country decreases the official value of its currency, for example, Russia changes the value of the ruble from $.16 to $.04, it is said to have ____ its currency.
A. floated
B. revalued
C. devalued
D. depreciated
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Explain the relationship between the interest rate on a bond and the default risk on a bond
What will be an ideal response?
Assuming no change in the nominal exchange rate, how will a lower rate of inflation in the United States relative to Canada affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The impact on the real exchange rate cannot be predicted. C) The real exchange rate will be unaffected. D) The real exchange rate will fall.
Macroeconomic equilibrium is best described as a situation in which: a. the slope of the aggregate demand curve equals the slope of the aggregate supply curve. b. quantity demanded exceeds quantity supplied
c. quantity demanded equals quantity supplied at a unique price level. d. quantity supplied exceeds quantity demanded at a unique price level. e. quantity supplied equals quantity demanded at a unique price level.