Which of the graphs in Figure 20-8 illustrates the AD-AS shifts associated with a currency depreciation?
Figure 20-8
Which of the graphs in Figure 20-8 illustrates the AD-AS shifts
associated with a currency depreciation?
a.1
b.2
c.4
d.3
Solutions
Expert Solution
Option D.
When a currency depreciates, its value decreases which
increases it's net exports and the imports become more costly this
will increase the aggregate demand.
Depreciation of currency will cause the price of domestic goods
and services to fall when compared to the supply of foreign goods
and services.
This shift the Aggregate supply curve to the left when the
currency depreciates.
This shifts are illustrated by the 3rd graph in the above
figure.
For the following scenarios, determine which curve shifts (AD
and/or SRAS and/or LRAS) and in which direction.
(a) A hurricane causes destruction of physical capital along the
east coast.
(b) Nominal wages fall
(c) Government spends $2.2 trillion dollars.
1. Which Figure(s) illustrates a decrease in the price of a substitute in production? 2. Which Figure(s) illustrates the effect of a natural disaster? 3. Which Figure(s) illustrates an increase in expected future product prices? 4. Which Figure(s) illustrates a decrease in the price of a substitute in consumption? 5. Which Figure(s) illustrates a decrease in the preference for a good?
The accompanying figure illustrates various binary relations from R to R. Which are functions? For those that are functions, which are onto? Which are one-to-one?
Which of the following is likely to cause a depreciation of the
domestic currency?
expansionary monetary policy
contractionary monetary policy
expansionary fiscal policy.
rising domestic interest rates.
The following figure illustrates the three different mechanisms by which DNA can be transferred from one bacterium to another. Write the names of the mechanisms by the letters a.), b.) and c.) in the figure.