The Keynesian short run impact of a arise in the level of foreign interest rates

Question

The Keynesian short run impact of a arise in the level of foreign interest rates under fixed exchange rates is illustrated in the AD-AS model as: In the Keynesian short run, with fixed exchange rates, a rise in the level of foreign interest rates. Will cause interest rates to and the level of investment in capital to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the Keynesian short run, with fixed exchange rates, a rise in the level of foreign interest rates will cause real income to and employment to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the Keynesian short run, with fixed exchange rates, a rise in the level of foreign interest rates will cause nominal wages to and real wages to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the Keynesian short run, with fixed exchange rates, a rise in the level of foreign interest rates will cause the current account (trade) surplus to and the capital (financial) account surplus to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the Keynesian short run, with fixed exchange rates, a rise in the level of foreign interest rates will cause household consumption to and the government budget deficit to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same Under fixed exchange rates, to support a devaluation of the home currency the central bank must foreign currency, which reserves in the banking system. buy; increases buy; decreases sell; decreases sell; increases The Neoclassical short run impact of a devaluation of the home currency under fixed exchange rates is illustrated in the AD-AS model as: In the "Neoclassical" short run. with fixed exchange rates, a devaluation of the home currency will cause interest rates to and the level of investment in capital to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the "Neoclassical" short run, with fixed exchange rates, a devaluation of the home currency will cause nominal wages to and employment to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the "Neoclassical" short run. with fixed exchange rates, a devaluation of the home currency will cause nominal wages to and the foreign exchange price of the home currency to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the "Neoclassical" short run. with fixed exchange rates, devaluation of the home currency will cause the current account (trade) surplus to and the capital (financial) account surplus to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the "Neoclassical" short run. with fixed exchange rates, devaluation of the home currency will cause household consumptions and the government budget deficit to . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same In the long run. following a devaluation of the home currency, real wages will and real income will . decrease; decrease decrease; increase increase; decrease increase; increase remain the same; remain the same

Explanation / Answer

c d b a b b c c c b b a b c

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