Which system of interest rates is theoretically worst for policy coordination among the industrial countries of the world? How has this played out since the 1980s?
What will be an ideal response?
— pro-fixed rate theorists predicted that with floating rates, countries would only make policies that helped themselves at the expense of the world economy (although it has been empirically proven that in the short run policy decisions are exported, requiring the "dirty float")
— pro-floaters rebutted that the fixed rate system provided coordination only by giving the U.S. a dominant position
— during the 1980s industrial countries could have collectively reduced the effects of recession by coordinating their policies much more effectively, that is floating rates have not provided more coordination as predicted
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
The short-run Phillips curve tradeoff becomes less favorable if either
A) the expected inflation rate or the natural unemployment rate increases. B) potential GDP or the natural unemployment rate increases. C) potential GDP or the natural unemployment rate decreases. D) the level of real GDP decreases or the natural unemployment rate decreases. E) the expected inflation rate increases or the natural unemployment rate decreases.
In a two-country, two-product world, the statement "Germany enjoys a comparative advantage over France in autos relative to ships" is equivalent to
A) France having a comparative advantage over Germany in ships. B) France having a comparative disadvantage compared to Germany in autos and ships. C) Germany having a comparative advantage over France in autos and ships. D) France having no comparative advantage over Germany. E) France should produce autos.
As wages for manufacturing workers rise, wages for service workers will stay the same
a. True b. False Indicate whether the statement is true or false