If the demand for Home exports decreased abroad, the Home fall in output would be greatest______. ( )
A: if the decrease was permanent and the exchange rate was fixed.
B: if the decrease was temporary and the exchange rate was fixed.
C: if the decrease was temporary and the exchange rate was floating.
D: if the decrease was permanent and the exchange rate was floating.
A: if the decrease was permanent and the exchange rate was fixed.
B: if the decrease was temporary and the exchange rate was fixed.
C: if the decrease was temporary and the exchange rate was floating.
D: if the decrease was permanent and the exchange rate was floating.
举一反三
- Which of the following is NOT a result of a permanent fall in foreign demand on one country's exports under floating exchange rate? ( ) A: A reduction in output by a smaller degree compared to temporary fall in demand B: A raised level of unemployment C: The AA curve shifts upwards due to the increased expected long-run exchange rate. D: Depreciation in home country's currency
- Which of the following is NOT a result of a temporary fall in foreign demand on one country's exports under floating exchange rate? ( ) A: The AA curve shifts downwards due to reduction of money supply. B: A fall in aggregate output C: A fall in the home interest rate D: The DD curve shifts to the left due to reduction of aggregate demand.
- The difference between a free floating exchange rate and a managed floating exchange rate is A: under managed float government intervention plays a role in determining the exchange rate. B: free floating exchange rates can only appreciate or depreciate by 5 units per day. C: the equilibrium exchange rate is always higher for managed float rates. D: all of the above
- Under a floating exchange rate, the government or central bank ties the official exchange rate to another country's currency or to the price of gold.
- Which one of the following statements is the MOST accurate? () A: Fiscal policy<br/>affects employment less under fixed than under flexible exchange rate<br/>regimes. B: Fiscal policy has<br/>the same effect on employment under fixed and flexible exchange rate<br/>regimes. C: Fiscal policy<br/>cannot affect employment under fixed exchange rate but does affect<br/>output under flexible exchange rate regimes. D: Fiscal policy<br/>affects employment more under fixed than under flexible exchange rate<br/>regimes.