Which of the following does NOT occur if Home starts a policy of permanent fiscal expansion:
A) Home's exchange rate increases.
B) Foreign's interest rate rises.
C) Home output rises.
D) Foreign output rises.
E) Current Account Balance increases.
Question 2
The monetary efficiency
A) loss from pegging the Norwegian krone to the euro (for example) will be higher if factors of production can migrate freely between Norway and the euro area.
B) gain from pegging the Norwegian krone to the euro (for example) will be lower if factors of production can migrate freely between Norway and the euro area.
C) gain from pegging the Norwegian krone to the euro (for example) will be higher if factors of production can not migrate freely between Norway and the euro area.
D) gain from pegging say the Norwegian krone to the euro (for example) will be higher if factors of production can migrate freely between Norway and the euro area.
E) gain or loss from pegging the Norwegian krone to the Euro cannot be predicted using the available information.
Thoracic Expansion, Anterior
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