In a two-period model with default, if the nation defaults on its debts in the future period
A) there are no consequences.
B) it bears a cost v.
C) collateral is seized.
D) it faces a higher interest rate.
B
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Explain how the AD curve can be derived from the IS-MP model
What will be an ideal response?
Firms in perfectly competitive markets are confined to making profits in the short run, but never a loss.
Answer the following statement true (T) or false (F)
Considering its direct effect on income, which of the following policies is most likely to reduce a country's trade deficit?
A. An increase in the money supply B. An increase in taxes C. An increase in government spending D. A cut in taxes
An important source of structural unemployment is
A) recessions. B) people looking for the right job decide to change jobs. C) unemployment insurance benefits. D) seasonal variations in aggregate demand.