Describe how a sudden stop leads to a financial crisis
What will be an ideal response?
A sudden shift from positive to negative flows from one year to the next in the foreign owned reserve assets in the nation and loans to domestic firms may cause the financial account to become negative. This means there are no inflows to finance a current account deficit, so it must move from a negative balance to a positive balance, usually by a sudden reduction in imports and an eventual increase in exports. This shift in trade relations may cause a deep recession.
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Fluctuations around the long-run aggregate supply curve are:
A. called the business cycle. B. experienced as expansions, recessions, and recoveries. C. normal for an economy. D. All of these are true.
A firm earns a profit of exactly zero at its optimal output level only if
a. P = MR. b. P = MC. c. P = AC. d. P = SR AVC.
The selling price of a property is $96,000. This can be financed if the buyer can put 10 percent down and pay a loan origination fee of 1.5 percent. How much cash must the buyer produce to complete this transaction?
A) $10,080 B) $10,896 C) $11,040 D) $11,084
Which of the following is a macroeconomic question?
A) What determines the unemployment rate? B) How is the production quantity of digital cameras determined? C) What factors determine the price of iPhones? D) What determines the wages and benefits of flight attendants?