* *Use the DD-AA Model of AD to answer questions 6-10. Suppose the US government increases government expenditure levels in response to a recession.*** This movement along the _ is due to an increase in DD curve ; the exchange rate ODD curve ; money demand AA curve : the exchange rate AA curve : money demand QUESTION 10 * *Use the DD-AA Model of AD to answer questions 6-10. Suppose the US government increases government expenditure levels in response to a recession.*** Ultimately, such fiscal policy would cause income to _ and the exchange rate to increase ; rise increase : fall () decrease : rise decrease : fall QUESTION 11 One of the major costs associated with fixing your exchange rate is the loss of independent monetary policy. True OFalse QUESTION 12 A fixed exchange rate system yields a byproduct of making domestic fiscal policy more effective. True False QUESTION 13 'Under a free floating exchange rate system, expansionary fiscal policy will result in the __._. of the domestic currency." appreciation depreciation QUESTION 14 A freely floating exchange rate system requires persistent central bank intervention in foreign exchange markets. True False