Author Question: In the long run, the exchange rate between two currencies is A) fixed. B) influenced by ... (Read 125 times)

Caiter2013 · **on:** Jun 29, 2018

In the long run, the exchange rate between two currencies is

A) fixed.
B) influenced by purchasing power parity.
C) undefined.
D) constant.
E) determined so that the current account balance equals zero.

Question 2

If autonomous spending increases by 500 billion and, as a result, equilibrium real GDP increases by 2 trillion, then we know that the

A) expenditure multiplier is 0.25.
B) MPC equals 1.
C) expenditure multiplier is 4.0.
D) expenditure multiplier is 2.0.
E) MPC is greater than 1.