Consider a fiscal expansion under a fixed exchange rate regime, where a revaluation (an increase in the exchange rate defended by the central bank) is undertaken to keep the IS curve in exactly the same spot. What is true of this final equilibrium? A. The real exchange rate is higher B. The real exchange rate is lower C. The real exchange rate is unchanged D. There is money neutrality
Consider a fiscal expansion under a fixed exchange rate regime, where a revaluation (an increase in the exchange rate defended by the central bank) is undertaken to keep the IS curve in exactly the same spot. What is true of this final equilibrium?
A. The real exchange rate is higher
B. The real exchange rate is lower
C. The real exchange rate is unchanged
D. There is money neutrality
2.
A. everyone likes shopping
B. indifference curves and ppfs are convex
C. uncertainty means people want to diversify
D. none of the above
3. The benefits of free trade are
A. proportional to the tariff size
B. proportional to the square of the tariff size
C. proportional to the cube of the tariff size
D. none of the above
Ans all
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