Author Question: In chapter 20, the expected future nominal exchange rate in the long run say, Eet+n, is assumed to ... (Read 27 times)

oliviahorn72 · **on:** Jun 30, 2018

In chapter 20, the expected future nominal exchange rate in the long run say, Eet+n, is assumed to be the nominal exchange rate at which

A) the current account is in balance.
B) the future rate of appreciation or depreciation is constant.
C) domestic and foreign price levels are equal.
D) one unit of foreign currency exchanges for one unit of domestic currency.
E) none of the above

Question 2

Suppose the saving rate is initially less than the golden rule saving rate. We know with certainty that a reduction in the saving rate will cause

A) a reduction in the capital labor ratio.
B) a reduction in output per worker.
C) a reduction in consumption per worker.
D) all of the above
E) none of the above