If the economy is in a recession, the inflation rate is ________ it would be at potential GDP. Other things equal, if the government implemented an expansionary fiscal policy, the inflation rate would ________
A) greater than; remain constant
B) greater than; decrease
C) less than; increase
D) less than; remain constant
C
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Only two exchange rate regimes can be considered hard pegs. These are:
A. flexible exchange rates and currency boards. B. dollarization and managed floating. C. currency boards and dollarization. D. the gold standard and inflation targeting.
A common tool for restricting trade through taxation is:
A. immigration restrictions. B. a tariff. C. quota. D. international waters use policies.
The present aim standard of rationality:
A. assumes that people's goals are themselves a choice variable and that people's choices about which goals to pursue are made efficiently. B. takes people's goals as given and assumes that people are efficient at pursuing whatever goals they happen to hold at the moment of action. C. argues that people are only able behave rationally if they are aware of how their actions affect others. D. assumes that people act in their own self-interest because cooperating with others is irrational.
A fall in the domestic interest rate leads to capital
A. outflows and exchange rate appreciation. B. outflows and exchange rate depreciation. C. inflows and exchange rate depreciation. D. inflows and exchange rate appreciation.