Explain the basic macroeconomic policy trilemma for open economies
What will be an ideal response?
Of three goals most countries share—independence in monetary policy, stability in the exchange rate, and the free movement of capital—only two can be reached simultaneously.
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Under which of the following sets of circumstances is it definitely the case that the average product increases as more labor is hired?
A) Total product increases as more labor is hired. B) The marginal product is equal to the average product. C) The marginal product is positive. D) The marginal product is greater than the average product. E) The marginal product is less than the average product.
Suppose external benefits are present in a market which results in the actual market price of $14 and market output of 150 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient outcome would be greater than 150 units. b. The efficient outcome would be less than 150 units. c. The efficient outcome would also be 150 units. d. The efficient price would be less than $14.
In an economy that relies on barter, trade requires a double-coincidence of wants
a. True b. False Indicate whether the statement is true or false
Based on this graph, during the 1940s and the Recession of 2008–2009, the national debt ______.
a. remained below 10 percent of GDP
b. was temporarily paid off
c. was at the same level
d. exceeded 100 percent of GDP