In an open economy under flexible exchange rates, a reduction in consumer confidence that causes a reduction in consumption will cause which of the following?
A) an appreciation of the domestic currency
B) a reduction in the exchange rate, E
C) a reduction in net exports
D) all of the above
E) none of the above
Question 2
An upward-sloping straight line on a linear scale will become a (an) ________ on a logarithmic scale.
A) upward sloping straight line
B) upward sloping curve that gets continually steeper
C) upward sloping curve that gets continually flatter
D) horizontal line
E) downward sloping straight line
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