If the dollar depreciates against the Indian rupee
A) The value of Indian imports to the United States does not change.
B) Indian imports to the U.S. become less expensive.
C) U.S. exports to India become more expensive.
D) U.S. exports to India become less expensive.
Question 2
If the absolute value of the tax multiplier equals 1.6, real GDP is 13 trillion, and potential real GDP is 13.4 trillion, then taxes would need to be cut by ________ to restore the economy to potential real GDP.
A) 250 billion
B) 400 billion
C) 640 billion
D) None of the above are correct. Taxes should be increased in this case.
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