Which of the following best describes circumstances surrounding the breakdown of the Bretton Woods system?
a. The United States was enjoying a persistent trade surplus.
b. There was too much dependence on the dollar because no other country had a stable currency.
c. Germany, with its strong currency, refused to defend the dollar.
d. Speculators were betting on the fall of the dollar.
e. All the other nations basically wished their currencies to appreciate, which was impossible under the system.
D
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While the demand for beer is relatively price inelastic, the price elasticity of demand for a particular brand is relatively high, due in large part to availability of close substitutes
Indicate whether the statement is true or false
Cyclical unemployment occurs when a(n): a. automobile worker is laid off from his job because of a recession
b. ski instructor loses his job after the winter season. c. typist loses his job as his skills have become obsolete in the current labor market. d. government employee takes early voluntary retirement.
For an economy starting at potential output, a decrease in investment in the short run results in a(n):
A. increase in potential output. B. recessionary output gap. C. expansionary output gap. D. decrease in potential output.
What were the principal causes of the U.S. government budget deficits of the 1980s? How did these budget deficits lead to the twin deficits? According to the Ricardian equivalence proposition, should twin deficits arise as a result of tax cuts?
What will be an ideal response?