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21. As the international value of the dollar rises, AS shifts outward and AD shifts inward.

a. True

b. False

22. If the dollar depreciates, both the aggregate demand curve and the aggregate supply curve shift inward.

a. True

b. False

23. A currency depreciation is usually inflationary.

a. True

b. False

24. The depreciation of the Japanese yen in 2002 would ease their problems with regard to recession.

a. True

b. False

25. An appreciation of the Japanese yen would shift the Japanese aggregate demand curve inward.

a. True

b. False

26. Interest rate increases lead to currency appreciation and increases in net exports.

a. True

b. False

27. International capital flows tend to strengthen the effects of interest rate changes on aggregate demand.

a. True

b. False

28. A rise in the domestic interest rate leads to capital outflows and makes the currency depreciate.

a. True

b. False

29. A currency appreciation reduces aggregate demand and increases aggregate supply.

a. True

b. False

30. An expansionary fiscal policy makes the exchange rate appreciate.

a. True

b. False

 

 

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