If,other Things Being Equal,a Country with a Flexible Exchange Rate

question 27

Multiple Choice

If,other things being equal,a country with a flexible exchange rate decreases its money supply,this will lead to _____ in the value of the country's currency,which will tend to _____ national income.

• A) a depreciation; increase
• B) a depreciation; decrease
• C) an appreciation; increase
• D) an appreciation; decrease

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Definitions:

Elastic Properties

Characteristics of materials that allow them to stretch and return to their original shape without permanent deformation.

External Intercostal Muscles

The External Intercostal Muscles are a group of muscles found between the ribs that aid in the process of inhalation by elevating the ribcage, expanding the thoracic cavity.

Pleural Cavity

The thin fluid-filled space between the two pulmonary pleurae of each lung, involved in respiratory mechanics.

Parietal Pleura

Serous membrane that lines the different parts of the wall of the pleural cavity.