MC Question 5 Which of the following statements is correct? [ 1 Point ] (A) The quantity quotation of the exchange rate defines the exchange rate as the price of the domestic currency in currency. terms of the foreign currency. An increase in the exchange rate implies an appreciation of the domestic (B) The price quotation of the exchange rate defines the exchange rate as the price of the domestic currency in terms of the foreign currency. An increase in the exchange rate implies an appreciation of the domestic currency. (C) The quantity quotation of the exchange rate defines the exchange rate as the price of the domestic currency in terms of the foreign currency. An increase in the exchange rate implies a depreciation of the domestic currency. (D) The quantity quotation of the exchange rate defines the exchange rate as the price of the foreign currency in terms of the domestic currency. An increase in the exchange rate implies an appreciation of the domestic currency. (E) The price quotation of the exchange rate defines the exchange rate as the price of the domestic currency in terms of the foreign currency. An increase in the exchange rate implies a depreciation of the domestic currency. MC-Question 6 [ 1 Point ] In the Phillips curve equation, which of the following will cause an increase in the current inflation rate? (A) an increase in the expected inflation rate (B) an increase in the current unemployment rate (C) a decline in the markup, u (D) a decrease in the natural rate of unemployment E) an increase in the unemployment gap (=current minus the natural unemployment rate) IC -Question 7 [ 1 Point ] onsider an economy which is under a fixed exchange rate regime and where output is initially above the natural vel of output. This economy can move toward its natural level of output via which of the following processes? A decrease in the price level (B) A devaluation of its currency )An increase in the foreign price level (D) Expansionary fiscal policy (E) A revaluation of its currency