Criteria for an optimum currency area include all the following except
A. extensive trade with each other.
B. a common language.
C. similar business cycle patterns.
D. fiscal transfers.
Answer: B
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Explain why the tax multiplier is different from the government purchases multiplier, in both sign and relative magnitude
What will be an ideal response?
When the economy suffers a temporary negative supply shock, the central bank's autonomous monetary policy to keep inflation at the target inflation rate leads to
A) more stable economic activities. B) a large deviation of output from its potential. C) divine coincidence. D) both B and C.
The equilibrium effects of a temporary increase in government spending include
A) an increase in the real wage and an increase in the real interest rate. B) an increase in the real wage and a decrease in the real interest rate. C) a decrease in the real wage and an increase in the real interest rate. D) a decrease in the real wage and a decrease in the real interest rate.
The entire U.S. federal budget process, beginning with the delivery of the President's budget to Congress and ending with the beginning of the fiscal year, takes about _____
a. one month b. six months c. nine months d. one year e. three months