Author Question: With a fixed exchange rate, an increase in the domestic price level will, for a constant foreign ... (Read 73 times)

vinney12 · **on:** Jun 30, 2018

With a fixed exchange rate, an increase in the domestic price level will, for a constant foreign price level,

a. increase exports and decrease imports.
b. make foreign goods relatively more expensive to U.S. citizens but U.S. exports will be relatively cheaper to foreigner buyers.
c. increase both exports and imports.
d. make foreign goods relatively cheaper to U.S. citizens but U.S. exports will be more expensive to foreign purchasers.

Question 2

The monetarists emphasize the

a. importance of fiscal policy for determining GDP.
b. the instability of the money supply.
c. the stability of velocity.
d. need to fine tune the level of economic activity.
e. both b and c.