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

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

The DD schedule shows all combinations of which 2 variables so that the output market is in equilibrium?

The aggregate demand for home input can be written as a function of: I. Real exchange rate. II) Government spending. III) Disposable income.

Which one of the following statements is MOST accurate?

Find the real exchange rate for the following case: Assume that the representative basket of European goods and services costs 40 euros and the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ________.

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.

If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is

Which statement best describes the current account balance in the short run?

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

Fill in the following table.

An intertemporal budget constraint

How does a rise in real income affect aggregate demand?

The domestic currency price of a representative domestic expenditure basket is

Fill in the following table.

A country's domestic currency's real exchange rate, q, is defined as

The interest parity condition requires that:

Find the real exchange rate for the following case: Assume that the representative basket of European goods costs 100 euros and the representative U.S. basket costs $125, and the dollar/euro exchange rate is $0.75 per euro, then the price of the European basket in terms of U.S. basket is:

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

Which one of the following statements is the MOST accurate?