Assume That Policy Makers Are Pursuing a Fixed Exchange Rate

question 13

Multiple Choice

Assume that policy makers are pursuing a fixed exchange rate regime and that output is initially less than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?

• A) A revaluation of the currency.
• B) A devaluation of the currency.
• C) An increase in the price level.
• D) An increase in the domestic interest rate.
• E) A decrease in the foreign price level.

---

Definitions:

Genotypic

Relating to the genotype, which comprises the entire set of genes in an organism that influence inherited traits.

Recessive

A genetic term referring to an allele that produces its characteristic phenotype only when its paired allele is identical.

Dominant

Influential, controlling, or prevailing over others, often used in both social and biological contexts to describe an entity with superior power or genes.

Genetic Counseling

The discipline that focuses on helping people deal with issues relating to inherited disorders.