The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused
A) the adoption of expansionary policies to return to growth.
B) large capital inflows to service the debt.
C) the adoption of strongly contractionary policies to reduce consumption and government deficits.
D) an intensification of industrial policies targeted on import substitutes.
E) a reduction in inequality.
C
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Suppose you were to believe that "money illusion" exists that is as prices and incomes both rise proportionally, people buy more. Which of the following characteristics of demand does that cause you to doubt?
a. demand functions are downward sloping b. demand has a positive vertical intercept c. demand has a positive horizontal intercept. d. demand functions are homogeneous of degree zero.
Which of the following "costs" could a firm that wants to remain in business avoid if it halted current production?
A. Opportunity costs B. Variable costs C. Fixed costs D. Sunk costs
Which of the following could generate economic profits for perfectly competitive firms in the short run, if they initially earn zero economic profits?
A. an increase in total fixed costs B. a fall in demand C. a unit tax on output D. a decrease in input prices
If a decrease in the Z factors resulted in a very large change in the price level and a very small change in aggregate output
A. then the U.S. economy must have been on the very flat part of its short-run aggregate supply curve. B. then the U.S. aggregate demand curve must be very steep. C. then the U.S. economy must have been on the very steep part of its short-run aggregate supply curve. D. then in the U.S. economy investment demand must not be sensitive to the interest rate.