Author Question: Which of the following events will cause the largest real depreciation for the domestic economy? ... (Read 19 times)

lbcchick · **on:** Jun 30, 2018

Which of the following events will cause the largest real depreciation for the domestic economy?

A) a 6 reduction in E and a 6 increase in the foreign price level (P)
B) a 6 increase in the domestic price level (P) and a 6 reduction in P
C) a 6 reduction in E and a 6 reduction in P
D) a 3 increase in E
E) a 2 increase in E and a 2 increase in P

Question 2

Based on our understanding of the labor market model presented in Chapter 6, we know that a reduction in the markup will cause

A) an increase in the equilibrium real wage.
B) a reduction in the equilibrium real wage.
C) an increase in the natural rate of unemployment.
D) a reduction in the natural rate of unemployment and no change in the real wage.