Exam 17: Output and the Exchange Rate in the Short Run

If consumers experience an increase in lifetime income, current spending will ________, current saving will ________, and future spending will ________.

Explain and give some examples of governmental policy problems.

Using a figure show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run.

Monetary expansion causes the current account balance to increase in the short run. Discuss. Is the same the case for fiscal expansion?

Which one of the following statements is the MOST accurate?

Using the DD-AA framework, which one of the following statements is the MOST accurate?

Which of the following have to be in equilibrium for the economy to be in equilibrium?

Imagine that the economy is at a point that is above both AA and DD, where both the output and asset markets are out of equilibrium. Which first action is TRUE?

In the short run, any fall in EP/P*, regardless of its causes, will cause

Why is the economy at full employment in the long run?

In long-run equilibrium after a permanent money-supply increase there follows:

The J-curve illustrates which of the following?

In the short run, we assume that the money prices of goods and services are

Fill in the following table.

Which one of the following statements is the MOST accurate?

Which of the following compete to determine whether the current account improves or worsens following a rise in the real exchange rate?

The percent by which import prices rise when the home currency depreciates by 1% is the degree of

What have we assumed when we conclude that a real depreciation of the currency improves the current account?

What is the real exchange rate? What is its relationship to the current account?

How does an increase in the real exchange rate affect exports and imports?