Author Question: Assume that the nominal exchange rate increases by 2. If prices (both domestic and foreign do not ... (Read 23 times)

ARLKQ · **on:** Jun 30, 2018

Assume that the nominal exchange rate increases by 2. If prices (both domestic and foreign do not change), we know that

A) domestic goods are now relatively cheaper.
B) domestic goods are now relatively more expensive.
C) foreign goods are now relatively cheaper.
D) both B and C

Question 2

A reduction in unemployment benefits will tend to cause which of the following?

A) an upward shift in the WS curve
B) a downward shift in the WS curve
C) an upward shift in the PS curve
D) a downward shift in the PS curve
E) none of the above