Author Question: The evidence suggests that in rich countries, a depreciation A) immediately improves the trade ... (Read 37 times)

anjilletteb · **on:** Jun 30, 2018

The evidence suggests that in rich countries, a depreciation

A) immediately improves the trade balance.
B) eventually improves the trade balance.
C) first improves, but then worsens the trade balance.
D) has no effect on the trade balance.
E) none of the above

Question 2

The zero lower bound refers to the situation that

A) the lowest the central bank can decrease the nominal policy rate is 0.
B) real interest rate is 0.
C) inflation rate is 0.
D) risk premium is 0.