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

question 3

Multiple Choice

If,other things being equal,a country with a flexible exchange rate increases 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

---

Definitions:

Marginal Rate of Substitution

The rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility.

Marginal Utilities

The supplementary utility or satisfaction received by using one more unit of a good or service.

Lemonade

A sweetened beverage made from lemon juice, water, and sugar, often associated with simple entrepreneurial ventures like lemonade stands.

Popcorn

A type of corn kernel which expands and puffs up when heated, often consumed as a snack.