Use table one to show the differences that result from weak currency versus stro

Question

Use table one to show the differences that result from weak currency versus strong currency.

      The table shows the higher level of output and the lower nominal exchange rate. Complete the table to indicate how the other variables differ.

(2 points each)

lower (¯),

higher (­),

not different (ND), or

not enough information (??).

Ee is the expected nominal exchange rate.

table one

Use TABLE ONE to show the differences that result from weak currency versus strong currency. The table shows the higher level of output and the lower nominal exchange rate. Complete the table to indicate how the other variables differ. (2 points each) > lower (), higher (), >not different (ND), or not enough information(??). Ee is the expected nominal exchange rate. TABLE ONE EX Ee IM

Explanation / Answer

In this setup
If currency is weak then export will go up and import will come down
Consumption will decrease and Investment decreases as r increases
More information needed to speak about inflation in this context
Labor Supply (Ls) Increases as unemployment increases production decreases
Labor Demand (Ld) decreases due to the same reason.

C E r I A NEI W EX Ee Y IM Pi NEI LS LD

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