Exam 20: Exchange Rates and The Macroeconomy

A currency appreciation reduces aggregate demand and increases aggregate supply.

The international trade response to a contractionary monetary policy will cause aggregate demand to shift ____ and aggregate supply to shift ____.

If the international value of the dollar rises,the

An expansionary fiscal policy will lead to

If Mexico experiences a period of stable prices while the United States experiences rapid inflation,what will happen in the United States?

In an open economy net exports must always be positive.

A currency depreciation is usually inflationary.

An expansionary fiscal policy makes the exchange rate appreciate.

A currency appreciation is disinflationary and contractionary if the

When the U.S.dollar appreciates,

The main international repercussion of either a fiscal expansion or monetary contraction is to

Because of their effect on interest rates:

Assume that Country X and Country Y are trading partners and the exchange rates are fixed.If prices in Country Y fall,which of the following is expected to happen?

Following an expansionary monetary policy,we would expect lower interest rates,dollar

Theoretically,when a currency depreciates one can predict that

If U.S.interest rates rise while foreign interest rates remain unchanged,

An increase in the U.S.price level relative to the price level of U.S.trading partners will cause the aggregate expenditures function in the United States to

The expected effect of the Bush tax cuts would be a(n)

A rise in the domestic interest rate leads to capital outflows and makes the currency depreciate.

Depreciation of the Japanese Yen would lead to