1. Which of the following is true about depreciation of birr in terms of dollar? • A. It implies increase domestic price for foreign currency B. It results import items to be cheaper in Ethiopia C. Amount of birr that is exchanged for unit of dollar is decrease D. It discourage import substitution in Ethiopia 2. One of the following is not considered as limitation of absolute purchasing power part theory of exchange rate determination. A. It the failure to include capital account B. It neglects tradable goods and services C. It fails to take into account the transportation cost D. All E. None 3. When money supply in the country decreases; A. It push down interest rate in short run B. It decreases the rate of return on domestic deposits in short run C. It allow to rise the value of domestic currency per unit of foreign currency in short ru D. Cannot result proportional price change in short run ​