Author Question: For this question, assume that policy makers are pursuing a fixed exchange rate regime and that ... (Read 107 times)

biggirl4568 · **on:** Jun 30, 2018

For this question, assume that policy makers are pursuing a fixed exchange rate regime and that output is initially greater than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?

A) an increase in the price level
B) a devaluation of the currency
C) a reduction in the domestic interest rate
D) an increase in the foreign price level
E) none of the above

Question 2

Which of the following will cause an increase in output per effective worker?

A) an increase in population growth
B) an increase in the rate of depreciation
C) a reduction in the saving rate
D) an increase in the rate of technological progress
E) an increase in the saving rate