Answer all questions:

Question 21

21) If Home's currency depreciates versus Foreign's currency:

a. Home's exports become cheaper to Foreign importers

b. Home's exports become more expensive to Foreign importers

c. Repatriated earnings from Foreign assets owned by Home decrease in value

d. both (a) and (c)

Question 22

22) Which of the following are examples of a change in government fiscal policy:

a. cut tax rates and cut government spending

b. increase government spending and increase tax rates

c. cut interest rates

d. both (a) and (b)

Question 23

23) As a result of the spending multiplier:

a. an increase in government spending leads to a multiplied decresae in real GDP

b. an increase in government spending leads to an equal increase in real GDP

c. an increase in government spending leads to a multiplied increase in real GDP

d. an increase in government spending has no effect on real GDP

Question 24

24) To increase Aggregate Demand (AD) in the economy the government could:

a. cut tax rates

b. increase its spending

c. increase interest rates

d. both (a) and (b)

Question 25

25) In a progressive tax system:

a. all income groups pay the same tax rate

b. as income goes up for low income groups their marginal tax rate decreases

c. as income goes up marginal tax rates increase

d. none of the above