PBC, Inc., a furniture manufacturer operating solely in Country A, engages you to analyze the effect of various events on the economic environment.

For each independent event below, select from the option list provided whether the economic indicators increase, decrease, remain the same, or are indeterminate. Each choice may be used once, more than once, or not at all.

Event Real GDP Price level 1. In response to an inflation rate increase from 2% to 3%, the government of Country A increases the nominal interest rate from 5% to 6%. 2. Country A approves some military technology for commercial use. This leads to overall technological advancement in most industries and improves customer expectations for the economic development of Country A. 3. During a trade war between Country A and Country B, Country A imposes 10% higher tariffs on products imported from Country B. 4. To support its national defense purchases, Country A's government imposes a national defense tax. 5. Country A's currency depreciates due to its easy monetary policy.Select an option below 0 Increases O Decreases O Remains the same 0 Indeterminate CANCEL