A
asn123
Member
A] Which of the statements about real variable in the economy is FALSE?
1.If nominal GDP rises by 5% with no inflation then real GDP will have risen by 5%
2.A nominal depriciation of a country's exchange rate represents a real depriciation if the domestic inflation rate is less than the foreign inflation rate
3.An increase in real income will lead to a rise in the demand for real money balances
4.Real intrest rates are positive if the expected rate of inflation is greater than the nominal rate of intrest.
B] Under a floating exchange rate system:
1.domestic inflation rates are unavoidably linked across national boundaries
2.domestic inflation in one country can lead to inflation in another
3.domestic inflation is dictated outside the bounds that would have constrained prices in a fixed exchange rate regim.
4. None of the above
Sorry for posting so late..my exams are in 2 days so please if someone could tell me the answers as soon as possible? Pleasee
Thanks in advance
1.If nominal GDP rises by 5% with no inflation then real GDP will have risen by 5%
2.A nominal depriciation of a country's exchange rate represents a real depriciation if the domestic inflation rate is less than the foreign inflation rate
3.An increase in real income will lead to a rise in the demand for real money balances
4.Real intrest rates are positive if the expected rate of inflation is greater than the nominal rate of intrest.
B] Under a floating exchange rate system:
1.domestic inflation rates are unavoidably linked across national boundaries
2.domestic inflation in one country can lead to inflation in another
3.domestic inflation is dictated outside the bounds that would have constrained prices in a fixed exchange rate regim.
4. None of the above
Sorry for posting so late..my exams are in 2 days so please if someone could tell me the answers as soon as possible? Pleasee
Thanks in advance
