Under a flexible exchange rate system a decline in the value of a currency relative to other currencies is a called a ________ and under a fixed exchange rate system a decrease in the official value of a currency is called a ________.
A. depreciation; devaluation
B. appreciation; revaluation
C. depreciation; appreciation
D. revaluation; appreciation
Answer: A
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A. Does not affect bank reserves. B. Can cause abrupt changes in the money supply. C. Does not affect the money multiplier. D. Has no impact on the lending capacity of the banking system.
Government purchases of goods and services are:
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A) decreases; increases; larger B) increases; decreases; smaller C) increases; increases; larger D) increases; increases; smaller E) decreases; increases; smaller