A country which does not revalue when financial markets expect it ...

[bobbie]

A country which does not revalue when financial markets expect it to will probably suffer
 
  A) a real depreciation of its currency.
  B) lower interest rates.
  C) a default on its national debt.
  D) all of the above
  E) none of the above

Question 2

Suppose the economy is initially in the steady state. A reduction in the depreciation rate () will cause
 
  A) an increase in K/N.
  B) an increase in Y/N.
  C) an increase in C/N.
  D) all of the above
  E) none of the above

[braelync]

Answer to Question 1

B

Answer to Question 2

D