Exchange Rates Practice Questions
Which of the following might occur following a depreciation of the domestic currency (tick multiple). Clue: Consider the Impact on AD/AS.
A rise in employment.
A fall in employment.
A rise in SR economic growth.
A fall in SR economic growth.
A rise in demand-pull inflationary pressure.
A fall in demand-pull inflationary pressure.
Cost of Imports increase.
Cost of Imports decrease.
Firms Profits increase.
Firms Profits decrease.
Cost-push inflationary pressure.
Cost-push deflationary pressure.
Expecations that the £ will rise may lead to:
A) An increase in the Demand for the Currency.
B) An increase in the Supply of the Currency.
C) A decrease in the demand for the currency.
D) A decrease in the Supply for the currency.
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