Author Question: A reduction in the real exchange rate will cause A) a reduction in net exports. B) a reduction ... (Read 59 times)

CBme · **on:** Jun 30, 2018

A reduction in the real exchange rate will cause

A) a reduction in net exports.
B) a reduction in the quantity of imports.
C) a reduction in output.
D) an increase in government spending.
E) all of the above

Question 2

Convergence refers to what phenomenon regarding growth theory?

What will be an ideal response?

reversalruiz · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

Convergence refers to the phenomenon where the levels of output per capita for countries tend to move closer to one another over time. This implies that countries that start with relatively lower levels of output per worker catch up to other countries and, in some cases, actually pass other countries.