What Are the Economic Effects of a Currency Depreciation

question 50

Multiple Choice

What are the economic effects of a currency depreciation?

• A)It will decrease aggregate demand and aggregate supply, so that output will certainly fall, and prices may fall as well.
• B)It will increase aggregate demand and aggregate supply, so that output will certainly rise, and prices may rise as well.
• C)It will increase aggregate demand and decrease aggregate supply, so that prices will certainly rise, and output may rise as well.
• D)It will decrease aggregate demand and increase aggregate supply, so that prices will certainly fall, and output may fall as well.

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Definitions:

Pavlov's Research

A series of experiments conducted by Ivan Pavlov that demonstrated the process of classical conditioning through the use of dogs, bells, and salivation.

Stimuli

External or internal factors that elicit a response from a living organism or a system.

CS-US Pairings

A term from classical conditioning theory referring to the repeated association of a conditioned stimulus (CS) with an unconditioned stimulus (US).

Magnitude

The size, extent, or dimensions of something, often used to describe the intensity or severity of an entity or event.