Under Flexible Exchange Rate, the Response of an Economy to a Temporary

question 77

Multiple Choice

Under flexible exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is

• A) the currency appreciates, and output falls.
• B) the currency depreciates, and output falls.
• C) the currency depreciates, and output increases.
• D) the currency depreciates, and output remains constant.
• E) the currency appreciates, and output increases.

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Definitions:

Parallel Structure

The repetition of a chosen grammatical form within a sentence to give pattern and rhythm.

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