Assuming Flexible Prices, If the Currency Depreciates More Than Anticipated

question 59

Multiple Choice

Assuming flexible prices, if the currency depreciates more than anticipated, then equilibrium output should _____ and the equilibrium price level should _____ in the short run.

• A) rise, rise
• B) rise, fall
• C) fall, rise
• D) fall, fall

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Definitions:

Equilibrium Price

The price at which the quantity of a good supplied is equal to the quantity of the good demanded.

Price Ceiling

A legal maximum price that can be charged for a good or service, intended to protect consumers.

Price Ceiling

A legally imposed maximum price on goods or services, intended to protect consumers from high costs.

Doctor Visit

A scheduled appointment with a medical professional for the evaluation, diagnosis, or treatment of a health condition.