Author Question: Suppose country A pegs its nominal exchange rate to country B and that country A has a higher ... (Read 93 times)

Redwolflake15 · **on:** Jun 30, 2018

Suppose country A pegs its nominal exchange rate to country B and that country A has a higher inflation rate than country B. In this situation, country A will experience

A) a real appreciation.
B) a worsening trade position.
C) an increase in the real exchange rate.
D) all of the above
E) none of the above

Question 2

In the absence of technological progress, a decrease in the saving rate will cause which of the following?

A) decrease temporarily the growth of output per worker
B) decrease the steady state growth of output per worker
C) increase temporarily the growth of output per worker
D) increase the steady state growth of output per worker
E) have an ambiguous effect on the growth of output per worker