If a Country's Currency Depreciates in the Foreign Exchange Markets

question 8

Multiple Choice

If a country's currency depreciates in the foreign exchange markets, the result will be a shift of the aggregate demand curve __________; in addition, if intermediate goods are an important component of the country's imports, the short-run aggregate supply curve __________.

• A) to the left; also will shift to the left
• B) to the left; will shift to the right
• C) to the right; will shift to the left
• D) to the right; also will shift to the right

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Definitions:

Net Assets

The total assets of an entity minus its total liabilities, representing the entity’s net worth or equity value.

Acquisition

The act of gaining ownership of a different corporation or business entity by either buying it or combining with it.

Credit Balance

A situation in an account where the total credits exceed the total debits, indicating the amount owed to the account holder or client.

Contingency Payment

A payment that is made only if certain specified conditions are met or certain outcomes occur.